More help for Thai Airways
Bid to protect its aircraft from seizure
published : 5 Jun 2020 at 04:00
newspaper section: News
A government panel is stepping up to help debt-ridden Thai Airways International Plc (THAI) pass any regulatory and contractual hurdles ahead of the national carrier's planned debt rehabilitation, according to Prapas Kong-Ied, director-general of the State Enterprise Policy Office (Sepo).
A state-appointed committee following up on the airline's rehabilitation, headed by Deputy Prime Minister Wissanu Krea-ngam and with Mr Prapas sitting as a member, will arrange the help, he said.
The troubled airline turned to the government because it has many contracts with trading partners and legal obligations that can only be resolved with the state's help.
These problems should be cleared before THAI enters rehabilitation, Mr Prapas said on Thursday.
Mr Prapas said the airline formally asked the Wissanu committee to coordinate with the government during a meeting on Monday when THAI acting president Chakkrit Parapuntaku presented a progress report on the carrier's rehabilitation plan which will next go to the Central Bankruptcy Court (CBC).
THAI needs to stay in business to generate revenue and pay off 244.9 billion baht of outstanding debt to national and international creditors.
The airline will address the court and try to convince creditors the rehabilitation plan will work, Mr Prapas said.
The airline specifically needs the government's help in reallocating slots for its flights.
The Transport Ministry will have a say on what could be done in this area, Mr Prapas added.
Mr Prapas said the Foreign Affairs Ministry will notify the authorities in countries where THAI provides services about the airline's rehabilitation before the bankruptcy court.
This will prevent THAI's aircraft from being impounded by overseas creditors.
Currently, 31 of its aircraft are on financing leases and another 39 are on operating leases.
The Wissanu panel will take up the issue with the Foreign Affairs Ministry which will appeal to foreign countries where THAI is present to help prevent its aircraft being seized by creditors.
The ministry will explain that THAI has been covered by an automatic stay order since it filed for rehabilitation under the kingdom's bankruptcy law, he said.
The Wissanu panel will try to remove potential legal quagmires for THAI and reinforce its defence during rehab proceedings in court, Mr Prapas said.
"We will do what we can to clear up issues so the rehab plan can go ahead," Mr Prapas said, insisting the follow-up panel will act only as a facilitator.
Mr Wissanu on Thursday said the Monday meeting directed Sepo to review THAI's privileges when it held state enterprise status to create a level playing field with other airlines.
The review will be considered by the cabinet, he said, adding: "There's no rush, although the issue will have to be resolved before this month is out."
In related news, police have launched an investigation into allegations of discrepancies in THAI ticket sales last year, according to an unnamed source.
A source at the Transport Ministry said that last year, ticket sales and freight revenues totalled 140 billion baht.
There were 25.4 million passengers who flew with THAI, the source said.
The average fare per passenger was 6,081 baht, which was significantly lower and not consistent with the rates charged to customers, the source said.
"THAI's revenue last year slumped from the previous year, which raises questions, given a higher average cabin factor [than the previous year] at 80%," the source said.
A team led by Pol Lt Gen Charnthep Sesaves, a former Metropolitan Police Bureau commissioner, has opened a probe into any possible graft that may have been committed at THAI.
The team will conclude its inquiry in August, the same month the CBC is scheduled to decide on THAI's rehabilitation plan.
- rehabilitation plan