Thai Airways has been given 30 days to revamp its financial recovery plan as part of a major restructuring effort to drive down costs and return the airline to profitability. The order to resubmit the carrier's rehabilitation plan comes after deputy transport minister Thaworn Senneam met with the carrier last week as part of a review of the company’s flailing financials.
Under the rehabilitation plan, the airline must submit a proposal that explicitly details cost-cutting measures on unprofitable routes and a revised marketing plan to increase internet ticketing
sales. A multimillion-dollar maintenance, repair, and overhaul joint venture with Airbus also remains under examination, with plans to break ground in early 2020.
An AINonline.com report said the struggling airline was also ordered to submit a monthly update regarding its ambitious aircraft acquisition scheme to procure a mix of 38 narrow-body and wide-body aircraft as well as expedite a fleet adjustment programme to sell 19 decommissioned aircraft in a bid to reduce maintenance costs.
Board members in late September rejected the airline’s aircraft procurement proposal, valued at US$5.1 billion, after they called for a revision of funding sources and an analysis of market conditions.
According to second-quarter regulatory filings, Thai Airways and its subsidiaries reported a net loss of $226 million in the first half of 2019, compared with a loss of about US$105 million during the same period a year before.
The AINonline.com report noted that Thai Airways president Sumet Damrongchaitham has sought to quell mounting concerns over the carrier’s financial predicament, stating the company controlled sufficient cash flow and a credit line that accounts for roughly 13% of revenue estimates.
Nevertheless, the carrier has requested a loan of US$1 billion for the 2020 fiscal year to cover investment and working capital needs.
According to Damrongchaitham, the airline would not use the loan to help finance its US$5.1 billion fleet procurement plan.
Nol van Fenema
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David Parsonage (Wednesday, 16 October 2019 05:24)
Privatise Thai Airways! The Management are a poor lot and need a sweepout.