Ex-THAI board member Banyong Pongpanich said on Wednesday that allowing Thai Airways International (THAI) to file for bankruptcy does not mean that the flagship airline will disappear.
Banyong posted on his Facebook page that filing for bankruptcy only means that the airline’s assets will be measured and evaluated. These assets may be used to repay a portion of THAI’s outstanding debt.
“Don’t be ashamed of the legal process,” he wrote. “This is not letting the airline go into bankruptcy like what many media have misunderstood and shared.”
He explained that this will allow stakeholders to agree on how to proceed. The key is to maintain most of the airline’s economic value and fairly share the value between the stakeholders.
If all else fails, the court can then rule the airline to be bankrupt. It will then be ordered to repay and allocate the remaining assets.
Banyong said last week that the loss-making state-owned enterprise now has more than 300 billion baht in debt.
Both Prime Minister Prayut Chan-ocha and his deputy in charge of economic affairs Somkid Jatusripitak insisted that the government’s rehabilitation plan will be able to save the airline.
The plan could include a bailout loan worth 50-55 billion baht.
Banyong also pointed out that many airlines have filed for bankruptcy in the past, including Pan Am, United Airlines, Swiss International Air Lines, Japan Airlines (JAL) and Malaysia Airlines (MAS).
United, Swiss, JAL and MAS are still operating today.
United was able to survive because they lowered the massive pension burden for ex-employees and cancelled all offers of free flights – something that THAI could consider, he said.
“If we inject money in without a major surgery of its operation, that will definitely bankrupt the airline and it will happen sooner rather than later, and all the money that has been injected will be gone,” Banyong added.
Finance Minister Uttama Savanayana said on Thursday that filing for bankruptcy is just one of many options. He said the rehabilitation plan is still under discussion and it will have to be approved by the cabinet first.
He also pointed out that there is no need to proceed with filing for bankruptcy before the rehabilitation plan because the two issues are not related.