BANGKOK — PM Prayut Chan-o-cha on Tuesday said he approved a final bailout plan for the debt-ridden flag carrier to a bankruptcy court – a process that could see the government relinquishing its majority in Thai Airway shares.
Gen. Prayut said the debt restructuring process for the Thai Airways International will be carried out in the Central Bankruptcy Court in accordance with the bankruptcy laws. The plan replaced a previous proposal of a government-funded 54 billion baht bridge loan, which was met with widespread criticism.
“It was a difficult decision,” Prayut said. “I don’t want to lay off more than 20,000 of its employees. I believe that once the airline has been rehabilitated, it will come back as a proud flag carrier, bringing in fame and acting as an ambassador to present Thainess to the world.”
The Cabinet also approved the divestment of the Ministry of Finance’s holding on the airline’s shares to less than 50 percent.
If the plan is implemented, the airline will no longer hold its state enterprise status, and the Thai Airways International Union is likely to be disbanded since it was established under the State Enterprise Labour Relations Act. The airline will also settle its debts and draft a rehabilitation plan with its creditors.
The trade union had previously opposed the idea, saying that the labor rights of the workforce could be jeopardized if the airline became a privately-owned company.
Thai Airways’ fleet was grounded until at least the end of June per the government’s ban on international flights.
The airline’s acting president Chakkrit Parapuntakul said it will continue to operate as usual despite the legal process.
“We are not intending to liquidate our accounts and fall into a bankruptcy,” Chakkrit said. “We will continue to fly passengers and cargos to their destinations, which will be carried out while the restructuring process is underway.”
Existing tickets and mileage will still be honored by the airline despite the bankruptcy procedures.