Panel mulls rescue plan for virus-hit Thai Airways

Panel mulls rescue plan for virus-hit Thai Airways

A working group has been formed to help financially-troubled national carrier Thai Airways International (THAI), said Deputy Prime Minister Somkid Jatusripitak.

The move came as the International Air Transport Association (IATA) revised down its forecast of expected passenger revenue by US$314 billion (10.2 trillion baht) in 2020, a 55% decline compared to last year.

Mr Somkid said yesterday the group, represented by the finance and transport ministries, will work informally to look at ways to fix a liquidity problem which is likely to beset the airline over the next three to six months.

The Covid-19 pandemic amplified the magnitude of the airline's financial problems, he said.

However, the deputy premier stressed THAI must demonstrate its ability to survive and be competitive as the national carrier. The airline must adopt changes and emerge stronger from the crisis, Mr Somkid said.

While it is a trying time for THAI, cooperation from all sides is necessary for the airline to pull through.

The working group and the State Enterprise Policy Office will chart a future direction for the airline, Mr Somkid when asked whether the government wants THAI to retain its status as a state enterprise.

Despite a liquidity crunch, Mr Somkid insisted THAI has enough cash flow to pay its employees.

Finance Minister Uttama Savanayana said the ministry had not discussed any potential sale of THAI shares to raise fresh funds to prop up the airline.

The ministry is still waiting for details of the rescue plan being worked out with THAI management.

THAI said earlier this month the emergency decree imposed to contain Covid-19 outbreak had caused restrictions at the border and hit passenger numbers, forcing the airline to halt all flights until the end of May.

Meanwhile, the IATA on Tuesday released an updated analysis showing the Covid-19 crisis will see airline passenger revenues drop by $314 billion.

Previously on March 24, IATA had estimated $252 billion in lost revenues, down 44% from 2019, if travel restrictions were enforced for three months.

The updated figures reflect an escalation of the crisis with annual passenger demand -- domestic and international -- expected to drop by 48% when compared to last year.

Travel restrictions will only heighten the impact of a drop in demand for travel with the worst of the effects predicted in the second quarter.

"The industry's outlook grows darker by the day. The scale of the crisis has made a sharp V-shaped recovery unlikely. Realistically, it will be a U-shaped recovery with domestic travel coming back faster than the international market," said Alexandre de Juniac, IATA's director-general and CEO.

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