[Update – 1] Thai Airways could let go as many as 10,000 employees, local media reports

Troubled national carrier Thai Airways (THAI) could let go as many as 10,000 employees according to local media reports this weekend.

Thai-language newspaper Prachachat reported that the airline could let go around 50 per cent of its workforce as part of its restructuring. According to the newspaper, the company will likely find some of those cuts in its operations side.

Thai currently has as many as 1,000 pilots and as many as 7,000 cabin crew, much more than required to operate its fleet.

High ranking THAI officials contacted by Thai Enquirer said that no decision on staff cuts have been made and that the possibility of losing half of its workforce was one of many suggestions on the table.

“No plan is finalized, the government and the private sector still needs to appoint the relevant personnel to oversee restructuring,” said a former member of the THAI board. “There are many plans on the table right now including staff cuts, none of it is finalized. But it is clear that drastic steps are needed.”

Nares Peungyam, president of the airline’s labour union, said last week that the staff were willing to lose many of its benefits if the restructuring could avoid mass layoffs.

THAI’s rehabilitation plan, which will allow it to ask the bankruptcy court to restructure, will see the company transition from a state-owned enterprise to majority-private owned venture. The cabinet has approved the plans.

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. The flagship carrier posted a net loss of 2.11 billion baht in 2017, 11.6 billion baht in 2018 and 12 billion baht in 2019.

Board members

Amid calls by the public and debtors for politics to stay away from THAI’s rehabilitation plan, the latest proposals of who will be in charge of this plan are still full of it. 

Last week, Deputy Prime Minister Wissanu Krea-ngam was tasked by the cabinet to set up a committee that will propose 15 people to be in charge of handling THAI’s rehabilitation plan and the filing of the plan to bankruptcy courts. 

With that comes the set up of a “superboard” which will consist of eight appointees, four from the Ministry of Finance (MOF), and four from the Ministry of Transport (MOT).

The latter is now playing a smaller role as the airline is no longer state-owned; however, the MOF is still holding to 47.86 per cent of THAI shares. 

Transport Minister Saksiam Chidchob proposed last week four names to be up for consideration including Deputy Transport Minister Thaworn Senneam, permanent transport secretary Chaiwat Thongkamkoon, deputy director of the Office of Transport and Traffic Policy and Planning Chayatan Phromsorn and Pirapan Salirathavibhaga, an adviser to Prime Minister Prayut Chan-o-cha. 

The MOF has yet to propose their four appointees.

In the meantime, the current THAI board is set to propose their 15 names to the MOT on May 24 before handing it over to Deputy Prime Minister Wissanu’s superboard, Minister Saksiam said.

Local reports, citing a source within the State Enterprise Policy Office (SEPO), also said one of THAI’s institutional creditors has called for fewer soldiers within THAI’s board.

The creditor also urged for more involvement from the MOT as they have a clearer plan which makes them faster in terms of decision making. They also said that the person who should spearhead the plan should have extensive knowledge in the aviation industry and has been through the Asian Financial Crisis in 1997 before.  

The creditor said the current board should not be put in charge of the plan as their management has proven inadequacy in previous plans. They also urged the Thai government to bring in foreign experts to the restructuring team. 

The name that they have proposed to spearhead the plan include Chumpol NaLamlieng, Vichit Suraphongchai, Banthoon Lamsam and Prasert Bunsumpun. 

Shares

Over the weekend, the MOF transferred 3.17 per cent of its THAI shares to state-backed Vayupak Fund which means that the flagship carrier is no longer a state-owned enterprise.

THAI share price stood at 22.7 baht per share just four years ago at the end of December 2016, when THAI assets were worth 49.55 billion baht and the ministry was holding about 25.29 billion baht worth of it.

With loss-making in previous years, the share price tumbled down to about 6.85 baht per share at the end of December 2019. The coronavirus pandemic then hit, forcing the flagship airline to enter its rehabilitation to a bankruptcy court. This took the price down to 4.9 baht per share on May 22. 

As the plan to enter the court was given a nod last week, the MOF has now transferred 69 million THAI shares at a price of 4.03 baht per share worth in 278.8 million baht to Vayupak Fund. The fund usually invests in state enterprises held by the ministry. 

The MOF now hold 47.86 per cent of THAI shares and own 15 per cent of investment units in Vayupak Fund. The fund is being managed by listed Krungthai Asset Management and MFG Asset Management.

After the transfer, it now holds 18.29 per cent of THAI shares.

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