Thai Airways: Bankruptcy or another multi-billion bailout the only options

Thailand’s national carrier Thai Airways, debt-laden with more than $9 billion from years of mismanagement paired with corruption and nepotism and battered by low-cost and Middle East airlines, is one more time at the brink of collapse with the government frantically searching for solutions, which have been narrowed down in recent days to only three options: Another multi-billion-bailout or filing for bankruptcy, or both.

After endless ministerial discussions and contradicting public statements by officials, Thailand’s finance minister Uttama Savanayana said that the government could be “open to the option” of Thai Airways filing for bankruptcy in order to “initiate its rehabilitation” with a $1.8-billion cash injection. This would allow – similar to a Chapter 11-filing in the US – reorganisation while freezing debt repayments.

However, the proposed bailout, to be shouldered by Thai taxpayers, would be just another one in a line of many cash injections into the beleaguered airline in the past, which is why it is being questioned heavily by the opposition, some senior officials, high-profile Thai business people and the public, with many saying that the government will have a hard time to justify such a huge expense of public money into a failed business whilst many Thais are struggling to feed themselves during the coronavirus pandemic.

No recovery plan, too many perks

While the fast-rotating Thai Airways CEOs in the past mainly blamed high competitive pressure in the air travel market and the rise of low-cost airlines for its troubles, there has never been a working rehabilitation plan to put the airline back on track in a changing business environment. Analysts also point out that the national carrier over the years has granted far too many perks for government figures and their families with free first-class travels and has also been used for unpaid official state missions even though it is a listed company.

The coronavirus pandemic, naturally, has accelerated the downward spiral for the airline further. As it stands now, Thai Airways has long surrendered its role as being a proud national icon and ended up as just another restructuring case in a long line of Thai state enterprises brought down by mismanagement and corruption.  

Thailand’s national carrier Thai Airways, debt-laden with more than $9 billion from years of mismanagement paired with corruption and nepotism and battered by low-cost and Middle East airlines, is one more time at the brink of collapse with the government frantically searching for solutions, which have been narrowed down in recent days to only three options: Another multi-billion-bailout or filing for bankruptcy, or both. After endless ministerial discussions and contradicting public statements by officials, Thailand’s finance minister Uttama Savanayana said that the government could be "open to the option" of Thai Airways filing for bankruptcy in order to “initiate its...

Thailand’s national carrier Thai Airways, debt-laden with more than $9 billion from years of mismanagement paired with corruption and nepotism and battered by low-cost and Middle East airlines, is one more time at the brink of collapse with the government frantically searching for solutions, which have been narrowed down in recent days to only three options: Another multi-billion-bailout or filing for bankruptcy, or both.

After endless ministerial discussions and contradicting public statements by officials, Thailand’s finance minister Uttama Savanayana said that the government could be “open to the option” of Thai Airways filing for bankruptcy in order to “initiate its rehabilitation” with a $1.8-billion cash injection. This would allow – similar to a Chapter 11-filing in the US – reorganisation while freezing debt repayments.

However, the proposed bailout, to be shouldered by Thai taxpayers, would be just another one in a line of many cash injections into the beleaguered airline in the past, which is why it is being questioned heavily by the opposition, some senior officials, high-profile Thai business people and the public, with many saying that the government will have a hard time to justify such a huge expense of public money into a failed business whilst many Thais are struggling to feed themselves during the coronavirus pandemic.

No recovery plan, too many perks

While the fast-rotating Thai Airways CEOs in the past mainly blamed high competitive pressure in the air travel market and the rise of low-cost airlines for its troubles, there has never been a working rehabilitation plan to put the airline back on track in a changing business environment. Analysts also point out that the national carrier over the years has granted far too many perks for government figures and their families with free first-class travels and has also been used for unpaid official state missions even though it is a listed company.

The coronavirus pandemic, naturally, has accelerated the downward spiral for the airline further. As it stands now, Thai Airways has long surrendered its role as being a proud national icon and ended up as just another restructuring case in a long line of Thai state enterprises brought down by mismanagement and corruption.  

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