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A Thai Airways A350 in Toulouse (Photo: Airbus)

Thai Airways Approved for Restructuring Plan

Thai Airways International managed to get its creditors’ approval on May 19 for a proposed restructuring plan that would help the airline refinance its debt in an effort to stay afloat and remain financially viable long-term, Nikkei reported.

In order for the seal of approval to be given, the restructuring plan needed a nod from creditors who together hold over 50% of the company’s debt. Of 38 creditors, 28 voted for the plan, though the 28 represented currently hold approximately 91.56% of Thai Airways’ total debt, meaning the plan passed with a significant margin.

“Thai Airways International will continue to update on the progress of [its] business reorganization accordingly,” the company said in a statement. “[The airline] would like to thank all creditors for the acceptance of and the confidence they have shown in [the] rehabilitation plan.”

The initial vote was put on hold on the first day of the creditors’ meeting that happened a week ago, as over a dozen of them requested amendments to the airline’s proposed restructuring plan. After several non-disclosed amendments made by both Thai Airways and its creditors, the plan was eventually approved.

The plan originally lacked details on how the airline would clear its red ink-marred balance sheet — one of the biggest challenges it faces as the airline reported a record loss of 141 billion baht ($4.5 billion) last year.

Mutually agreed-upon amendments included allowing creditors to convert some outstanding debt to equity stakes in the company after the seventh year of restructuring and to seek financial support from the government to gain the creditors’ trust in the restructuring plan.

However, the airline’s alarming balance sheet issues were not fully addressed, and creditors were hesitant to allow huge write-offs as part of the restructuring process due to a history of mismanagement.

“The rehabilitation could never be accomplished with favoritism and the lack of good governance and sincerity in management,” wrote Pirapan Salirathavibhaga, an independent director and one of the planners, in a statement to Nikkei.

A Future for Thai Airways

Thailand’s cash-strapped national carrier entered a restructuring process by the Central Bankruptcy Court in September last year after the Covid-19 pandemic forced the closure of many borders, nearly halting international travel.

Dealing the airline with its final blow resulted in it having carried 76% fewer passengers and 72% less cargo by volume last year as compared with 2019. Dwindling numbers resulted in a 74% decline in operating revenue, down to 48.6 billion baht.

Consecutive annual losses have also completely mopped out Thai Airways’ shareholder equity, which depleted to negative 128.6 billion baht from a previous total of positive 11.7 billion baht.

Now with an approved restructuring plan which was designed by the company’s board members and an outside consulting firm, the airline can focus on improving profitability. This would result in having to cut the airline’s workforce by half and executive positions by 30%.

The company is reviewing its asset portfolio as well. On April 27, Thai Airways announced the sale of a training facility and the land it occupied for 1.81 billion baht. The airline has been selling off jetliners and other investments to improve efficiency and raise working capital.

There was also mention of a possible capital increase of 50 billion baht, but even if these plans come to fruition, the airline says that its shareholder equity would not rise above zero until at least 2030.

According to Thai Airways, the court will hold a hearing on May 28 to formally approve the plan. The national flag carrier will have at least five years to implement it. Under the rules, the execution can be extended for a year no more than twice, meaning the process could last seven years at most.


  • Fascinated by aircraft from a very young age, Charlotte’s dream was to work alongside the big birds one day. Pursuing her dream, she went on to achieve her diploma in Aviation Management and is currently working on her degree in Aviation Business in Administration with a minor in Air Traffic Management. When she’s not busy with school assignments, you can find her aircraft spotting for long hours at the airport. In Charlotte’s heart, the Queen of the Skies will always be her favorite aircraft.

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