According to a media source, Thailand plans to go to the bankruptcy court to submit a rehabilitation plan for its national carrier, Thai Airways International, rather than go ahead with a previously planned rescue.
The State Enterprise Policy Committee that oversees policies for state-run enterprises agreed that the airline should seek such rehabilitation, as per a government spokeswoman Narumon Pinyosinwat told reporters on Monday.
The procedure replaces a previous rescue plan, which involves the airline seeking a 58.1 billion baht (S$2.6 billion) loan guaranteed by the government. “It is similar to filing Chapter 11 in the United States,” said Narumon Pinyosinwat, adding that details of the rehabilitation plan have not been discussed
Governments worldwide have devoted more than $85 billion to prop up airlines after the coronavirus pandemic wiped out travel demand and grounded fleets.
Thailand’s borders are restricted under a state of emergency through May and most inbound international flights are banned until the end of June, though some domestic flights have restarted.
Thai Airways, like every other carrier in the world, has suffered because of the COVID-19 pandemic and the virtual halt to air traffic. But the carrier's financial situation was assuredly in dire straits long before the outbreak.
THAI's labor union has made it clear it would oppose any plan that seeks to privatize the airline's businesses, insisting that the company must remain a state enterprise and a single organization. But the union later retracted its demand calling for a single entity, characterizing it as a viable option for survival.
The union has also called for no forced layoffs and demanded that its representatives have a say in the rehabilitation plan, instead of leaving it to board members and executives to make the crucial decisions.
In the case of THAI, the saga resembles Italy's Alitalia: the airline filed for bankruptcy in 2017 after employees rejected a job-cuts proposal aimed at reducing costs. Moreover, both Italy and Thailand have made considerable revenue from tourism, with the industry contributing to more than 10% of GDP.