Thai Airways at risk of closure – Malaysia Airlines shortlists investors
Thailand’s national carrier Thai Airways could suffer the fate of being closed down if its modified restructuring plan – one of many in the past – remains unsuccessful, according to a message sent to executives by the airline’s president Sumeth Damrongchaitham.
“Thai Airways is really in a crisis and we have little time,” Damrongchaitham said on October 22, calling upon staff to cooperate with the airline’s rehabilitation efforts in the face of “fierce competition.”
“Today there is no comfort zone. Everyone will die if the vessel sinks,” he said.
Part of the new restructuring plan is a reshuffle of the airline’s management and finances, as well as a reconsideration of the plan to spend $1.5 billion on 38 new aircraft. A multimillion-dollar maintenance, repair and overhaul joint venture with Airbus, which was set to break ground in early 2020, also remains under examination.
The carrier will also expedite a fleet adjustment programme to sell 19 decommissioned aircraft in a bid to reduce maintenance costs, reduce the salaries of executive staff and implement a zero inventory policy at its catering department.
The statement comes a day after Damrongchaitham said that Thai Airways is considering shutting down six unprofitable flight routes to Southeast Asian cities, namely Vientiane, Luang Prabang, Phnom Penh, Hanoi, Ho Chi Minh City and Yangon, citing strong competition from discount airlines.
Thai Airways reported a net loss of $226 million in the first half of 2019, compared with a loss of about $105 million during the same period a year before. According to a company forecast, that the airline could see net losses exceed $329 million by year-end. The carrier has requested a government loan of $1 billion for the 2020 fiscal year to cover investment and working capital needs.
Thai Airways, founded in 1960, has a current fleet size of 84, flies to 74 national and international destinations and employs more than 22,000 people. It is 51-per cent owned by Thailand’s ministry of finance, while the rest is owned by minor institutional shareholders and private investors. The airline’s share price dropped by 2.47 per cent on the news.
Malaysia to decide over strategic partnership in months
Meanwhile, the Malaysian government has shortlisted four potential investors for a strategic partnership with its ailing national carrier Malaysia Airlines, economic affairs minister Mohamed Azmin Ali said on October 22, without naming the candidates due to a non-disclosure agreement.
Malaysian Aviation Group, the carrier’s holding company, and the airline’s owner Khazanah Nasional had invited proposals from 20 investors to become strategic partners for Malaysia Airlines. Of that, four strategic investors have been shortlisted to be “strictly and thoroughly” evaluated, the minister said.
“We expect – after further evaluation is done – the presentation to Khazanah’s board of directors to be done in November, and a decision will be made by end of this year, or early next year,” he said, adding that the Malaysian state will keep “an important stake” in the carrier, but not necessarily a majority.
Khazanah Nasional’s financial performance took a hit last year, with almost half of its 7.3 billion ringgit ($1.74 billion) impairment loss stemming from sustaining Malaysia Airlines.
Thailand’s national carrier Thai Airways could suffer the fate of being closed down if its modified restructuring plan – one of many in the past – remains unsuccessful, according to a message sent to executives by the airline’s president Sumeth Damrongchaitham. “Thai Airways is really in a crisis and we have little time,” Damrongchaitham said on October 22, calling upon staff to cooperate with the airline’s rehabilitation efforts in the face of “fierce competition.” “Today there is no comfort zone. Everyone will die if the vessel sinks,” he said. Part of the new restructuring plan is a reshuffle of the...
Thailand’s national carrier Thai Airways could suffer the fate of being closed down if its modified restructuring plan – one of many in the past – remains unsuccessful, according to a message sent to executives by the airline’s president Sumeth Damrongchaitham.
“Thai Airways is really in a crisis and we have little time,” Damrongchaitham said on October 22, calling upon staff to cooperate with the airline’s rehabilitation efforts in the face of “fierce competition.”
“Today there is no comfort zone. Everyone will die if the vessel sinks,” he said.
Part of the new restructuring plan is a reshuffle of the airline’s management and finances, as well as a reconsideration of the plan to spend $1.5 billion on 38 new aircraft. A multimillion-dollar maintenance, repair and overhaul joint venture with Airbus, which was set to break ground in early 2020, also remains under examination.
The carrier will also expedite a fleet adjustment programme to sell 19 decommissioned aircraft in a bid to reduce maintenance costs, reduce the salaries of executive staff and implement a zero inventory policy at its catering department.
The statement comes a day after Damrongchaitham said that Thai Airways is considering shutting down six unprofitable flight routes to Southeast Asian cities, namely Vientiane, Luang Prabang, Phnom Penh, Hanoi, Ho Chi Minh City and Yangon, citing strong competition from discount airlines.
Thai Airways reported a net loss of $226 million in the first half of 2019, compared with a loss of about $105 million during the same period a year before. According to a company forecast, that the airline could see net losses exceed $329 million by year-end. The carrier has requested a government loan of $1 billion for the 2020 fiscal year to cover investment and working capital needs.
Thai Airways, founded in 1960, has a current fleet size of 84, flies to 74 national and international destinations and employs more than 22,000 people. It is 51-per cent owned by Thailand’s ministry of finance, while the rest is owned by minor institutional shareholders and private investors. The airline’s share price dropped by 2.47 per cent on the news.
Malaysia to decide over strategic partnership in months
Meanwhile, the Malaysian government has shortlisted four potential investors for a strategic partnership with its ailing national carrier Malaysia Airlines, economic affairs minister Mohamed Azmin Ali said on October 22, without naming the candidates due to a non-disclosure agreement.
Malaysian Aviation Group, the carrier’s holding company, and the airline’s owner Khazanah Nasional had invited proposals from 20 investors to become strategic partners for Malaysia Airlines. Of that, four strategic investors have been shortlisted to be “strictly and thoroughly” evaluated, the minister said.
“We expect – after further evaluation is done – the presentation to Khazanah’s board of directors to be done in November, and a decision will be made by end of this year, or early next year,” he said, adding that the Malaysian state will keep “an important stake” in the carrier, but not necessarily a majority.
Khazanah Nasional’s financial performance took a hit last year, with almost half of its 7.3 billion ringgit ($1.74 billion) impairment loss stemming from sustaining Malaysia Airlines.
