Thai Airways has had a rocky few years, with all of its problems coming to a head due to the pandemic. The airline has been trying to turn itself around in recent months, with a rehabilitation plan getting closer to approval. The move comes just weeks before Thai resumes international flights to destinations globally under the Phuket Sandbox. Let’s find out more about Thai Airways’ latest situation.
Last month, Thai Airways received the approval of its creditors to go ahead with a fresh rehabilitation plan. With 91.56% of credits supporting the plan, Thai finally had a way to deal with its enormous debt pile of $13.4 billion.
However, just as the airline finally cleared the way for its rehabilitation, two creditors raised a last-minute objection. This forced the Bangkok Central Bankruptcy Court to halt approval until the objections were resolved. The new date for approving the plan is set for June 15th, assuming the issues are resolved from then.
While there is pressure from banks and other financial institutions, Thai Airways is looking optimistic about its future. If the rescue plan passes the muster of the bankruptcy court, the airline hopes to revive its fortunes through deep staff cuts, fleet reductions, and making operational changes.
However, even if the plan passes, Thai Airways will remain in ‘rehabilitation’ until at least 2025, as it navigates through its debts. However, creditors face the unenviable choice of cutting their losses and losing big or betting that Thai will bounce back in the future. For the airline, this deal stands between it and bankruptcy.
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Returning to the skies
While Thai deals with its financial situation at home, the carrier is looking to ramp up its flights this summer. In particular, international flights are increasing thanks to the new Phuket Sandbox initiative, which will allow vaccinated travelers from low and medium-risk countries to enter Phuket without a quarantine.
As part of the initiative, Thai is adding flight direct flights from Copenhagen, Frankfurt, London Heathrow, and Paris to Phuket. Additionally, Hong Kong will also see a direct connection to the province. All these routes will commence from July 2nd and more details can be found here.
If successful, the sandbox could become a framework for Thailand to reopen to international visitors later this year. The country closed its border in March 2020, crippling airlines and tourism in the nation. While there was a strong domestic recovery, international travelers remain central to the economy.
For now, the future of Thai Airways remains uncertain. While the airline is unlikely to completely shut down, according to experts, a prolonged bankruptcy is possible. Currently, the airline’s best hope is to have its rehabilitation plan accepted and begin the process of becoming profitable again.
What do you think about the future of Thai Airways? Let us know in the comments!