Published on : Wednesday, March 3, 2021
Thai Airways International announced that it would cut back its operations significantly by cutting 50% of its workforce and its aircraft in operation from 102 to 86 as part of a rehabilitation plan that it submitted to the bankruptcy court earlier in the day.
The rehabilitation process will see Thai Airways International’s number of full-time employees reduced from 27,944 as it stood in 2019 to between 13,000 and 15,000. Efforts to redesign the organization and revamp compensation will bring the proportion of total flight revenues that are taken up by crew costs down from 23% to 13%, the carrier said.
The financially battered-airline will aim to be in a stable state of profitability by 2025 through the restructuring measures and assuming that air travel recovers to normal levels by 2024.
The company, however, did not mention concrete measures to secure stable sources of funding through the rehabilitation during a news conference held on Tuesday, even though an executive told reporters that it will have to raise 50 billion baht ($1.65 billion) of working capital to operate the company for the next two years.
Nor did it ask creditors to write-off any of its debt. Thai Airways’ plan may appear insufficient in terms of addressing issues on financial restructuring.
Thai Airways International first asked the court to supervise a rehabilitation plan back in May 2020, becoming one of the world’s first major airlines to seek legal relief due to massive financial damage brought on by COVID-19 travel restrictions.
The motion was accepted in September, but the airline has since slipped further. According to its 2020 financial results, released on Thursday, the legacy carrier recorded its worst-ever net loss, 141 billion baht, as the COVID-19 crisis decimated its revenues, bringing its shareholder equity to minus 128.6 billion baht as of December, down from 11.7 billion baht a year earlier.