Cash-strapped Thai Airways facing troubles on international flights


Thailand’s national carrier Thai Airways, which is currently under bankruptcy protection as the airline’s liquidity eroded under the coronavirus pandemic, is feeling the heat on the few international flights it is still operating.

According to insiders, a repatriation flight under the flight number TG923 from Frankfurt to Bangkok on August 10, which arrived earlier in the day from Bangkok to pick up around 220 passengers, was held back for around nine hours because of problems paying the plane to be refueled at Frankfurt’s international airport.

Scheduled to take off on August 10, 9pm, the aircraft started on 5.45am the next morning after the fuel bill was somehow settled. According to passengers’ Twitter accounts, they were not allowed to leave the plane during the hour-long delay and had to sit there the entire night.

Thai Airways has grounded most of its flights as demand has plunged to almost zero. For August, it has scheduled only two other repatriation roundtrips, from Taipei and Copenhagen.

Chansin Treenuchagron, the airline’s acting president, said the flights are aimed at Germans, Danes and Taiwanese stranded in Thailand due to the Covid-19 lockdown and to bring back Thais from those countries in turn. Other nationalities could also board the flights, he said.

Rehabilitation plan due for August 17

Meanwhile, Thai Airways is working its debt rehabilitation plan which has to be submitted to the country’s Central Bankruptcy Court on August 17, Treenuchagron said.

The plan primarily seeks to find an arrangement with scores of cooperatives, financial institutes and mutual funds that hold debentures worth more than 70 billion baht ($2.25 billion), as well as provide details of the rehabilitation and future business strategy of the airline and how the it would repay debts and make money in future.

Adding to the pressure, the preparation of the rehabilitation plans has brought to light that Thai Airways will have to pay more than 1,600 employees pensions worth 5.4 billion baht ($170 million) over the next 13 years, according to a source at the airline.

The “surprising” revelation raised questions about the soundness of the airline’s financial management and its balance sheet auditing, a person with knowledge of the matter said.

UPDATE: On August 14, Thai Airways reported a loss of $900 million for the first half of this year, mainly blaming the Covid-19 crisis for it. Trading in Thai Airways shares was suspended by the Stock Exchange of Thailand on that day after auditor Deloitte Touche Tohmatsu Jaiyos declined to sign off on the carrier’s financial statements for the period, saying it couldn’t reach a conclusion on the statements “due to issues including a lack of liquidity and debt defaults,” which created “material uncertainty” and may affect the value of assets and liabilities.



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Thailand’s national carrier Thai Airways, which is currently under bankruptcy protection as the airline’s liquidity eroded under the coronavirus pandemic, is feeling the heat on the few international flights it is still operating. According to insiders, a repatriation flight under the flight number TG923 from Frankfurt to Bangkok on August 10, which arrived earlier in the day from Bangkok to pick up around 220 passengers, was held back for around nine hours because of problems paying the plane to be refueled at Frankfurt’s international airport. Scheduled to take off on August 10, 9pm, the aircraft started on 5.45am the next...


Thailand’s national carrier Thai Airways, which is currently under bankruptcy protection as the airline’s liquidity eroded under the coronavirus pandemic, is feeling the heat on the few international flights it is still operating.

According to insiders, a repatriation flight under the flight number TG923 from Frankfurt to Bangkok on August 10, which arrived earlier in the day from Bangkok to pick up around 220 passengers, was held back for around nine hours because of problems paying the plane to be refueled at Frankfurt’s international airport.

Scheduled to take off on August 10, 9pm, the aircraft started on 5.45am the next morning after the fuel bill was somehow settled. According to passengers’ Twitter accounts, they were not allowed to leave the plane during the hour-long delay and had to sit there the entire night.

Thai Airways has grounded most of its flights as demand has plunged to almost zero. For August, it has scheduled only two other repatriation roundtrips, from Taipei and Copenhagen.

Chansin Treenuchagron, the airline’s acting president, said the flights are aimed at Germans, Danes and Taiwanese stranded in Thailand due to the Covid-19 lockdown and to bring back Thais from those countries in turn. Other nationalities could also board the flights, he said.

Rehabilitation plan due for August 17

Meanwhile, Thai Airways is working its debt rehabilitation plan which has to be submitted to the country’s Central Bankruptcy Court on August 17, Treenuchagron said.

The plan primarily seeks to find an arrangement with scores of cooperatives, financial institutes and mutual funds that hold debentures worth more than 70 billion baht ($2.25 billion), as well as provide details of the rehabilitation and future business strategy of the airline and how the it would repay debts and make money in future.

Adding to the pressure, the preparation of the rehabilitation plans has brought to light that Thai Airways will have to pay more than 1,600 employees pensions worth 5.4 billion baht ($170 million) over the next 13 years, according to a source at the airline.

The “surprising” revelation raised questions about the soundness of the airline’s financial management and its balance sheet auditing, a person with knowledge of the matter said.

UPDATE: On August 14, Thai Airways reported a loss of $900 million for the first half of this year, mainly blaming the Covid-19 crisis for it. Trading in Thai Airways shares was suspended by the Stock Exchange of Thailand on that day after auditor Deloitte Touche Tohmatsu Jaiyos declined to sign off on the carrier’s financial statements for the period, saying it couldn’t reach a conclusion on the statements “due to issues including a lack of liquidity and debt defaults,” which created “material uncertainty” and may affect the value of assets and liabilities.



Support ASEAN news

Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

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Donation Total: $10.00

 

 

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