The Central Bankruptcy Court has approved the revised business reorganisation plan of Thai Airways International (THAI), setting in motion its full financial restructuring process, according to a high-ranking source in the company.
The highly anticipated decision came after the airline submitted its revised plan last month.
Executives overseeing the rehabilitation said at the time that the revised plan reflected a better-than-expected recovery from the most financially trying period in the flag carrier’s history.
The airline has reported steadily improving operational and financial performance and a healthier balance sheet since the easing of Covid-19 restrictions and the reopening of the country’s borders, which has pushed up passenger and cargo traffic in recent months.
The revised plan has won approval from the majority of the airline’s creditors, including the Finance Ministry. The ministry views the plan as a critical element in getting the airline out of financial rehabilitation and returning it to the stock market faster, probably by 2025, according to the source.
With its business plan given the all-clear by the court, THAI will proceed with hiring a financial adviser to prepare details of a debt-to-equity conversion and recapitalisation worth 25 billion baht to be completed over the next two years. The target is half of what was set prior to the business plan revision, the source said.
Overall, THAI currently has cash flow of around 20 billion baht.
The national carrier has undergone a massive downsizing as part of a plan to bring its headcount and fleet size more in line with business expectations.
Staff numbers have been reduced from 29,000 to 14,400, including 3,800 crew members and about 900 pilots, lowering the payroll from 2 billion baht a month to about 700 million.
The airline has also dramatically downsized its fleet of 103 planes. It has sold or is in the process of selling 45 jets, which will leave it with just 58 aircraft, excluding three leased Boeing 777-300ERs.
The airline has added three more 777-300ER aircraft to its fleet after taking delivery of them this week.
Two planes, handed over on Oct 18 and 19, were royally bestowed the names of Alongkorn and Srimongkhon. The third aircraft, given the royally bestowed name of Theparat, is due to be delivered on Oct 26.
The new-generation aircraft are capable of flying long-haul routes and equipped with state-of-the-art technology. The planes, with eight seats in first class, 40 in business and 255 in economy, are also fuel-efficient and environmentally friendly.
In April this year, the airline took delivery of three Boeing 777-300ERs to meet the growing demand for flights. The jets are serving lucrative long-haul routes, the airline said.
THAI has reportedly sold or is in the process of selling 45 jets, leaving it with just 58 aircraft, excluding the three leased 777-300ERs.
THAI is deploying or redeploying aircraft as it continues to restore flight frequency to several routes.
The airline’s cabin factor has climbed to a solid 80% since the beginning of the year. The number of passengers flying the airline has grown to an average 17,554 per day now compared to 2,092 per day in January. The number is expected to rise further during the Christmas and New Year holidays.