The cabinet on Tuesday approved the submission of Thai Airways International (THAI)’s rehabilitation plan to a bankruptcy court, Prime Minister Prayut Chan-ocha said.
Prayut said it was a “tough decision” but it was the “best option” going forward.
“Thai Airways should be a company that creates reputation and income for the Thai people,” Prayut said after the cabinet meeting.
The Ministry of Finance was also ordered to divest its holding on THAI shares from 51 per cent to less than 50 per cent. This means that the flagship airline will no longer be state-owned and the divested shares could be sold to the state-backed Vayupak Fund.
Prayut said that the decision to allow Thailand to file a rehabilitation plan was in order to save as many jobs in the company as possible. A complete bankruptcy filing would have seen the company let go many of its 20,000 work force.
Ex-THAI board member Banyong Pongpanich said last week that the loss-making state-owned enterprise now is more than 300 billion baht in debt.
The airline said in early April that they only have enough cash left to pay their employees’ wages for one month as the yearly budget for 2020 is now down to 10-12 billion baht.
Operation to continue as normal
Chakkrit Parapuntakul, THAI’s Acting President, said on Tuesday that the airline will continue to operate as normal while the legal proceedings take place.
He said the submission of the rehabilitation under the bankruptcy act to a bankruptcy court does not mean that the airline is bankrupt. He said submitting the plan to court will allow the company to better accomplish its rehabilitation targets.
Chakkrit said the airline will continue to operate as normal while the plan is being implemented. The airline will continue to fly to its destinations, send cargos, and other services.
This means that all of its tickets will continue to be valid and its mileage programs will continue to be honored.