Creditors of Thai Airways International, holding a total of 91.56% of the airline’s external debt, have approved a business reorganization plan, the company announced in a filing to the Stock Exchange of Thailand (SET).
The plan, including three amendments added in consultation with the creditors, now needs final approval by Thailand’s Central Bankruptcy Court on May 28.
The carrier has generated losses for several consecutive years. It ran up $67 million USD in losses in 2017, $370 million USD in 2018, and $383 million USD in losses in 2019.
Losses skyrocketed to $4.5 billion USD in 2020 because of the COVID-19 pandemic, which saw the airline cease virtually all operations for an extended period.
The restructuring plan pegs the company’s total debt at $13.1 billion USD.
According to the approved plan, it will apply for a new long-term loan or revolving loan worth $1.6 billion USD.
The airline initially sought a $1.7 billion USD bailout loan from Thailand’s government after the onset of last year’s crisis but was refused.
The Cabinet in May last year approved a reduction in the government’s stake in the airline to below 50% as part of the reorganization plan, shrinking the Finance Ministry’s stake from 51% to 47.86%
With the government reducing its stake, the airline lost its status as a state enterprise. The action also meant that the airline’s state enterprise union was automatically dissolved.
The airline has already downsized by cutting 8,700 positions, of both full-time and contracted employees. It currently has around 21,000 employees and has announced plans to reduce the total of its workforce to 13,000 to 15,000 by the first quarter of 2022.
The statement to the stock exchange said five people have been appointed to administer the plan.
Two are the airline’s acting Chief Executive Officer Chansin Treenuchagron and its former CEO Piyasvasti Amranand. The others are Finance Ministry official Pornchai Thiravet, former Energy Minister Siri Jirapongphan, and Executive Vice President and Manager of Bangkok Bank’s Legal Department Kraisorn Barameeauychai.