A rehabilitation plan for Thai Airways International (THAI) will be put in place for the next 3-6 months, said the Deputy Prime Minister Somkid Jatusripitak after a meeting with Finance Minister Uttama Savanayana on Thursday.
The rehabilitation plan is expected to be worth 50-70 billion baht based on the assumption that the coronavirus outbreak will be contained by October. The government is looking for a loan to fund it and the guarantee will be provided by the Finance Minister.
Uttama mentioned that the government is not currently in talks with any private companies to bail out THAI but he did not seem to shut down the possibility.
“We cannot talk about the details [on Thursday] but the government will find the best way out,” Uttama added. “In regards to whether Thai Airways will continue to be a state-owned enterprise or not, the committee and the State Enterprise Policy Office will have to discuss the possibility first.”
Transport Minister Saksayam Chidchob said the discussion for the rehabilitation plan will begin the week ending April 26. The ministry is now expecting to reduce the size of THAI and to cut more costs by letting go of any loss-making operations.
The flagship airline have stated they only have enough cash left to pay their employees’ wages for April as the yearly budget is now down to 10-12 billion baht for 2020. They have suspended all international flights since the beginning of April because of the coronavirus pandemic.
THAI and its subsidiary posted a loss of 12 billion baht in 2019 and its president has also resigned in March.
However, THAI’s shares went up on Friday morning following the news that the airline will receive a bailout. The stock price jumped by 0.8 baht or 12.6 per cent from 6.35 baht at closing on Thursday to 7.15 baht by noon on Friday.
Not the only one in trouble
THAI is not the only airlines that needs financial help from the government. Eight other airlines reminded the government on Friday they are also waiting for the soft loan they had requested earlier, which is worth a cumulative of 24.15 billion baht.
They have asked for a soft loan with an interest rate of 2 per cent for 60 months. They would require at least 25 per cent of their requested amount by April if they are to keep on hiring.
Similar to THAI, the airlines reasoned that they could no longer pay their staff, as nearly 100 per cent of their flights have been grounded. There are about 20,000-30,000 people working for these airlines.
Here are the amount of loans requested by each airline:
- Bangkok Airways (BA) – 3 billion baht
- Thai AirAsia – 4.5 billion baht
- Thai Air Asia X – 3 billion baht
- Thai Lion Air – 3.75 billion baht
- Thai Vietjet – 900 million baht
- Thai Smile Airways – 1.5 billion baht
- NokAir – 4 billion baht
- NokScoot – 3.5 billion baht