A bankruptcy court in Bangkok has given Thai Airways the green light to go ahead and restructure the airline. Akin to the Chapter 11 process in the United States, insolvency experts will attempt to steer the embattled airline out of its financial strife. But with US$11 billion in debt and having defaulted on loans and bonds worth around one-third of the airline’s assets, it’s going to be a rough ride ahead for Thailand’s national airline.
Another step in the long road ahead for Thai Airways
On Monday, Bangkok’s Central Bankruptcy Court allowed an application to proceed with a formal restructuring process. The process to restructure the airline began in May when the Thai Government sold down its stake in Thai Airways. That allowed the airline to make an initial application to restructure to the courts and shield it from creditors.
Since then, Thai Airways has staggered along. Presently, seven of its 75 planes are in service. Last month, the airline announced a US$900 million loss from the first half of 2020.
Chanchai Chaiprasit, PricewaterhouseCooper’s Chief Executive Officer in Thailand, told Bloomberg there’s a lot of work ahead for Thai Airways.
“The court’s debt rehabilitation approval is just a tiny step. It’s an uphill task to come up with a debt plan that would satisfy banks, aircraft lessors, suppliers, and other lenders.”
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