Thai Airways International (THAI) will borrow money to survive the coronavirus crisis, and will remain a state enterprise, the Finance Ministry announced on Wednesday.
Permanent secretary Prasong Poontaneat said a meeting of the State Enterprise Policy Commission, chaired by Prime Minister Prayut Chan-o-cha, on Wednesday agreed on the need to save the national flag carrier.
An informed source said the meeting also agreed that professionals should be brought in to manage the struggling airline.
Mr Prasong said the meeting resolved that a rehabilitation plan would be drawn up for THAI, and it would include borrowing, to maintain its status as the national airline and a state enterprise.
Financial consultants would work out the plan, and the Finance Ministry would guarantee the loan for THAI, he said.
"A ceiling for the loan will be set, and the actual amount will depend on the degree of its necessity. THAI will strictly follow the rehabilitation plan," Mr Prasong said.
A source at Government House said the cabinet would lift its restriction on the Finance Ministry acting as loan guarantor, specifically to save Thai Airways. The ministry is barred from guaranteeing loans for any state enterprise that has posted losses for three years in a row.
"The meeting agreed to protect THAI, but it will happen on the condition that professionals will take over its management. The urgent need for now is short-term liquidity," the source said.
The national carrier posted a net loss of 2.11 billion baht in 2017, which widened to 11.6 billion baht in 2018 and 12 billion baht last year, according to Stock Exchange of Thailand (SET) data.