Three Directors and the Acting Chief Executive Officer of Thai Airways have resigned one day after Bangkok’s Central Bankruptcy Court approved the airline’s rehabilitation plan to restructure its debt and return to profitability.
After delays, rehabilitation plan approved
While the rehabilitation plan enjoyed the backing of around 92% of creditors, the court still needed to sign off on the plan. Last-minute objections from two large creditors in May delayed the court hearing until Tuesday. The airline owes creditors US$12.86 billion.
“After the Central Bankruptcy Court considered two objections against the business rehabilitation plan submitted by creditors, the planner’s clarification, and the official receiver’s opinion regarding several issues, the Central Bankruptcy Court issued an order to approve the business rehabilitation plan,” said Thai Airways in a filing to the Stock Exchange of Thailand.
According to an annex to the filing, there were 13,133 applications for debt repayment filed by creditors with the official receiver. The rehabilitation plan classifies creditors into 36 groups consisting of one group of secured creditors and 35 groups of unsecured creditors. Secured creditors account for US$45.8 million of the total debt.
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Thai Airways CEO & three Directors resign
In the wake of the court hearing, in separate filings to the Stock Exchange of Thailand, Acting CEO Chansin Treenuchagron and Directors Chaiyapruk Didyasarin, Chakkrit Parapuntakul, and Boontuck Wungcharoen all announced their resignations from the Thai Airways board late on Tuesday.
Chansin Treenuchagron is stepping down to become one of five administrators who will attempt to restructure Thai Airways. Working alongside him is former Thai Airways CEO Piyasvasti Amranand. The well-regarded Piyasvasti Amranand was in charge of Thai Airways in 2012, the last time it made a decent profit. The new Acting CEO at Thai Airways is Suvadhana Sibunruang.
The administrators want to get the airline back into the black by the middle of the decade. That will depend on two factors – a return to normal flying conditions around the world and the administrator’s ability to turn the beleaguered airline around.
“We will execute our plan,” a confident Chansin Treenuchagron said at a news conference on Tuesday. At the same time, the now-former Thai Airways CEO said he hoped to see the first signs of progress in three to six months.
Planes going back to lessors
Aircraft lessors and financiers, who between them are owed US$263 million, are in ongoing talks with the airline. According to aviation database ch-aviation, Thai Airways has reduced its fleet to 104 aircraft. That includes planes owned by associated companies of the operator such as subsidiaries, parent companies, or companies controlled by the same group of shareholders as the operator.
Thai Airways currently has 24 leased planes, but Reuters reports the airline is in talks to send 16 of those planes back. AerCap has six planes at Thai. Lessors Amedeo and BOC Aviation have four planes each at the airline. DP Aircraft, Park Aerospace Holdings, and SMBC Aviation Capital each have two aircraft flying for Thai. Lessors Aercastle, Avenue Capital Aircraft Holdings, Castlelake, and China Minsheng Investment Group all have one plane each at Thai.
Thai Airways is also reportedly in talks with private financial institutions and the Thai Government regarding ongoing funding for the airline. The Thai Government last year sold down its stake in the airline to assist it in restructuring. Since then, the Government has sent mixed messages about its willingness to continue funding Thai Airways.
At Tuesday’s news conference, Chansin Treenuchagron said he hoped to have Thai Airways back in course in three to five years.