Keep politics out of THAI rehab: Korn

Keep politics out of THAI rehab: Korn

Thai Airways International planes at Suvarnabhumi Airport. (Bangkok Post file photo)
Thai Airways International planes at Suvarnabhumi Airport. (Bangkok Post file photo)

Kla Party leader Korn Chatikavanij has warned the government to keep politics out of Thai Airways International Plc's (THAI) debt-rehabilitation and not to seek to revert the airline to its former state enterprise status.

On Facebook, the former finance minister said he was disappointed with the options the Finance Ministry has floated for easing the airline's financial predicament. One option was to inject 25 billion baht to recapitalise the carrier as well as guarantee new loans worth another 25 billion baht.

The second option was to guarantee a loan worth 50 billion baht if the government opted out of the recapitalisation.

The loan guarantee would be financed by state budget, meaning THAI would effectively be reinstated as a state enterprise. The airline lost its state-owned status last year when the ministry decided to reduce its stake to under 50% of the total, in order to facilitate the debt-rehabilitation process.

Mr Korn said if the airline returned to profit in the future, the government would unlikely be able to recoup the money it pours into the company. This is because any profit would be divided up and most of it would go to the creditors.

What should be done is for negotiations to be held with the creditors to lower the debts. Without debt being bargained down, THAI is in no position to mobilise new funds from investors, which is why it is coming back to ask for an infusion of funds from the government, according to the former finance minister. When the government decided not to bail out the financially troubled carrier last year and subsequently let it enter the debt-restructuring process in the Central Bankruptcy Court, most people agreed with the move as they hoped THAI would emerge from the rehab as a professionally run and profitable company, Mr Korn said. He added that by being a privately operated airline, it would also be immune to interference from political post holders and the military. The airline board members are known to include top brass, most of whom have served in the air force.

"The government must assert that no politicians or civil servants will ever cast their influence over THAI again," he said.

Mr Korn also suggested that if new state funds were injected into THAI, there must be more money invested in the airline from private firms.

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