Union slams new airline plan
THAI's rehab better option, say workers
The workers union of Thai Airways International Plc (THAI) has voiced its opposition to any plans to establish a new flag carrier to replace the ailing national airline, saying far too much has been invested in the airline, which has contributed significantly to the economy.
In a statement released on Tuesday, the union firmly rejected the idea, saying it would make much better sense to rehabilitate the ailing carrier, which already has a solid and internationally known brand.
Finance Minister Arkhom Termpittayapaisith said there haven't been any discussions about turning the airline into a state-owned enterprise like it had been. It will be up to the airline's creditors to decide, he said.
The government, through the Finance Ministry, was a majority shareholder in the airline -- but 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.
With debts totalling over 300 billion baht, the airline is currently seeking to rehabilitate its finances through the Central Bankruptcy Court.
While THAI isn't the only airline that has sought to reorganise its financial obligations through the courts since the Covid-19 pandemic brought international travel to a halt, it is among the few which is reeling from the aftermath of widespread graft by politicians in previous governments.
The union urged the government to maintain its support for THAI's debt-restructuring efforts so that the airline can emerge stronger.
To help reduce its losses, the carrier has adopted aggressive cost-cutting and streamlining measures, which include wide retrenchments.
THAI has the potential to return to profit by putting key revenue drivers to work, such as aircraft repair, cargo logistics and ground services, the union said in its statement.
The union added a new airline would not be competitive given the current sluggish aviation market.
The union's statement came as the International Air Transport Association (IATA) forecasted net airline industry losses to reach US$47.7 billion (about 1.47 trillion baht) this year.
However, this represents a vast improvement on the estimated net industry loss of $126.4 billion incurred last year.
"Losses will be reduced from 2020, but the pain of the crisis increases," said Willie Walsh, IATA's director-general.
Government-imposed travel restrictions, however, continue to dampen demand for international travel.
Despite an estimated 2.4 billion people expected to travel by air this year, airlines are expected to lose a further $81 billion, according to IATA estimates.