BANGKOK (Reuters) – The government is ready to back a rescue package for Thai Airways International Pcl <THAI.BK>, but it will entail a full restructuring and there will be no second chances, the prime minister.
Seeking union support for the plan, drafted amid a global travel slump caused by the coronavirus outbreak, Prayuth Chan-ocha said adjusting the airline’s organisational structure and headcount would be challenging.
“This is an enterprise that we have to rehabilitate and this is the last chance we have to manage the issue so it does not get worse,” he told a news briefing.
The package, details of which have not been confirmed, has not yet been submitted to cabinet, he said.
The majority state-owned airline is seeking a loan of 58.1 billion baht ($1.79 billion) guaranteed by the Ministry of Finance to stop it from running out of money, according to a draft of the plan seen by Reuters last week.
In exchange, the carrier would agree to cut its fleet size and lay off staff, the documents showed.
The flagship carrier, in which the ministry holds a 51% stake, was in financial difficulties before the coronavirus outbreak, having reported losses since 2017.
In March it suspended flights as travel demand slumped, and its president resigned after less than two years in the job.
The Thai Airways Union said it would cooperate with a “clear plan” that succeeded in rehabilitating the carrier. But it was concerned about the risk of interference from outside interests.
Because the airline is a state enterprise, major investment decisions such as aircraft procurement require approval from multiple government agencies, potentially exposing it to influence from third parties.
“The union … will be against any policy with a hidden agenda that damages the airline and benefits certain groups,” its President, Nares Peung-yaem, told Reuters.
(Reporting by Chayut Setboonsarng and Panarat Thepgumpanat; editing by John Stonestreet)