The Finance Ministry admitted yesterday that financially crippled Thai Airways International Plc (THAI) could go into debt rehabilitation under the bankruptcy law.
Finance Minister Uttama Savanayana said yesterday the national flag carrier was at a critical junction with its survival hinging upon either of two rehabilitation plans -- one already partly created and approved by the State Enterprise Policy Office (Sepo) and the other, still optional under the bankruptcy law but which is touted by many experts and politicians.
Despite Prime Minister Prayut Chan-o-cha's assertion that the time is not yet ripe for THAI to enter bankruptcy-dictated rehabilitation, Mr Uttama indicated it cannot be ruled out.
Mr Uttama's comments came after his absence was noted at a meeting with the Transport Ministry yesterday to find a way out for THAI's financial woes.
A source in the Transport Ministry said the meeting found the Sepo-approved rehab blueprint, prepared jointly by Sepo and THAI to pave the way for the Finance Ministry to guarantee a 50-billion-baht bailout loan expected to be procured by the airline, was flawed.
The meeting also thought the loan would was not an "ideal" solution to salvage the national carrier, the source added. However, the Sepo-approved plan contained a suggestion on a bankruptcy court-dictated rehab which would keep the airline flying and let it negotiate terms with creditors more effectively. The Sepo-approved plan is also reported to have been mulled over by the Finance Ministry, which is the biggest shareholder in the national carrier.
The plan was originally thought to be slated for consideration by the cabinet at its weekly meeting on Tuesday, given the urgency of the issue. However, it has not yet reached the cabinet.
After yesterday's meeting, Anutin Charnvirakul, the deputy prime minister overseeing the Transport Ministry, said nothing conclusive had come out of the meeting. Personally, he felt the bailout loan was not a "viable" alternative.
Mr Uttama, meanwhile, said all sides are trying their best to resolve THAI's financial crisis. He conceded time is not on the airline's side.
Regardless of which rehabilitation plan is chosen, the airline has to bite the bullet and undertake a radical overhaul, he said. "It'll be nothing shy of a major change although the method of implementing such a change is being looked at," he added.
The Sepo-approved is intended to pave the way for the Finance Ministry to guarantee a 50-billion-baht bailout loan expected to be procured by the airline. However, the proposed loan has been chastised by the opposition and critics as a waste of taxpayers' money.
Also, it was reported the cabinet has reason to be concerned that the bailout loan might backfire. THAI, while retaining its status as a state enterprise, is also a public company and if the cabinet gives the nod to the loan guarantee, it could risk being accused of extending financial help for the vested interests of the company.
"Ultimately, the final decision [on the airline's fate] will be made by the cabinet," Mr Uttama said.
An emergency has now arisen where a drying-up of liquidity may prevent the airline from paying its staff this month, he said, though the Finance Ministry has negotiated with creditors which will allow some cash to be maintained for payroll purposes.