Rather than adopt Bangkok’s bustling traffic pattern, Thai Airways is taking a much more measured and serene path to navigate its restructuring process.
On Friday, Thai Airways International Public Company Limited (THAI) announced that it had submitted a petition to change the agreed restructuring plan. In 2020, the Thai government, as the majority owner, placed THAI under bankruptcy protection, similar to the US Chapter 11 process, with debts of approximately $2.88 billion. In broad terms, the restructuring plan aims to swap all of the principal of Thai Airways’ debt to its main creditor, the Thai government, for equity.
Some small changes but they are positive for THAI
The original plan also involved THAI borrowing 50 billion baht ($1.4 billion) to fund its liquidity, but the amendment reduced that amount to $700 million. Half of this amount can be raised through a six-year loan or bond, with the other half coming from short-term renewable loans. The loan amount was halved due to higher-than-expected revenues in the first half of 2022, layoffs and the raising of approximately $260 million through the sale of assets.
The national carrier has put in place a recovery strategy which could include the sale of its Airbus A380s. Photo: Thomas Boon – Single Flight
On Friday, the regime’s administrator, Piyasvasti Amranand, said:
“The problem now is the north [Asia] as there are limits to travel, especially to China, Hong Kong, Taiwan and Japan. But in other regions, everything has been lifted and there is a lot of displacement.”
He also revealed that THAI would sell 12 planes and a quick check of the ch-aviation.com database brings up a few likely candidates. THAI has a total fleet of 66 aircraft consisting of nine Airbus A330-300s, 12 A350-900s, six A380-800s, eight Boeing B747-400s, six B777-200ERs, 17 B777-300ERs, six B787-8s and two B787- 9 aircraft. There are currently 29 idle aircraft, including the A330, A380 and B747, owned by THAI and likely to be considered for sale.
At the top of the list of planes for sale are THAI Airways’ Boeing 747-400s. Photo: Getty Images
Passenger numbers increase as regional borders reopen
The higher-than-expected incomes are the result of the easing of border restrictions. According to Reuters, THAI carried about 19 million passengers in 2019 and 4.5 million in the first half of this year. The airline plans to carry 9.18 million next year, 11.8 million in 2024 and 12.44 million in 2025. Piyasvasti said the airline increased its load factor to around 70% in June , and that it was close to 90% on flights to Europe. Piyasvasti, Thailand’s former energy minister, also served as chairman of Thai Airways between October 2009 and June 2012. At the time, THAI was in financial difficulty and he returned to the beleaguered airline as part of its restructuring, to be ousted in a conference room. coup in 2012.
Details of the amendment, released July 1, confirm the debt-for-equity swap for the Department of Finance for the full principal amount. Financial institutions and bondholders will see 24.5% of their principal repaid through an exchange of debt for equity, with the balance repaid in cash. Thai Airways expects to receive approximately $2.26 billion in capital from the restructuring process, which it intends to complete in 2024. The THAI amendment reads: “If this process can be completed under the proposed plan amendment, THAI’s equity will be positive in 2024. and [the] THAI stock is expected to be traded again in 2025.”
Has anyone been on a THAI flight lately?