Thai Airways International Plc will go to bankruptcy court rather than go ahead with a rescue plan that was previously suggested as a solution to aid the ailing airline.
The airline had previously hoped to cash a 90 billion baht bailout cheque from the Thai Government, however, officials today confirmed that the bailout will not go ahead leaving the airline no option but to file for bankruptcy.
A visit to bankruptcy court will likely see a reconstruction of the airline that has outstanding debt of more than 92 billion baht accused over the past three years. Even before the covid-19 pandemic, Thai Airways was posting significant losses.
The most likely scenario is that Thai Airways will be forced to reduce the size of its fleet and retire older or larger aircraft as has happened with other airlines who are facing financial uncertainty over the last few weeks.
Owned by the Finance Ministry, Thai Airways is currently unable to operate due to the extended incoming international flight ban to Thailand which will not end until June 30th.
A government spokeswoman, Narumon Pinyosinwat, confirmed the bankruptcy filing, saying:
“The State-Enterprise Planning Office agreed in principle for the rehabilitation of Thai Airways in court… the procedure will be submitted to Cabinet tomorrow… It is similar to filing Chapter 11 in the United States.”