THAI expects court to accept rehab plan

22nd Sep 2022

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Thai Airways International (THAI) reported on Tuesday that it expects the Central Bankruptcy Court to approve its amended corporate reorganisation plan in the first or second week of October, despite resistance from some of its creditors.

The struggling flag carrier released a new plan to get back on its feet earlier this month. This came after its financial problems improved more than expected.

Chai Eamsiri, the airline's senior chief and acting chief financial officer, said that the Central Bankruptcy Court has summoned the administrator of the business reorganisation plan to appear today and tomorrow due to the resistance of some creditors to the amended plan.

Nonetheless, Mr. Chai is certain that the court will accept the revised plan within the first part of the next month. Once the proposal is accepted, the airline will go on with its debt restructuring and recapitalisation process.

He said that the airline wants to guarantee it has solid finances so that it may recapitalize when the time is appropriate.

Once the debt rehabilitation procedure begins, THAI will lose its position as a state-owned corporation, as the Finance Ministry's part of the company's stock will fall from 44% to 33%.

"The plan marks the point of no return for THAI, as afterwards it will go ahead as a [public] company, not a state enterprise," he stated.

As a result of one of the modifications to the updated business rehabilitation plan, creditors will get a greater proportion of the company's stock than governmental agencies.

Mr. Chai said that the new way of owning shares would make it harder for politics to affect how the company works.

"Reducing such influence will enable the board to professionally manage the airline," he added.

The carrier plans to finish its business recovery plan in two years. This year, the company is hopeful that it will do much better than it did last year.

This year, THAI plans to fly 4.5 million people, with between 80 and 82% of the seats filled.

If China and Japan reopen this year, Mr. Chai said, the airline's passenger flow would increase significantly.

According to the International Air Transport Association, the worldwide passenger demand in July remained robust.

In July, revenue passenger kilometres (RPKs) increased by 58.8% compared to July of the previous year. Global traffic is now at 74.6% of its pre-crisis peak.

In July of this year, domestic traffic increased 4.1% compared to the same month last year, propelling the sector's recovery. Domestic traffic in July 2022 was 86.9% of its July 2019 level. International traffic increased by 150.6% compared to July of the previous year. International RPKs for the month of July hit 67.9% of July 2019 levels.