Thai Airways swings into profit amid restructuring
Thai Airways posted a net profit in the first half of 2021, its first since the beginning of the COVID-19 pandemic. The positive financial outcome came as the flag carrier entered a court-supervised business restructuring.
On August 16, 2021, Thai Airways reported a consolidated net profit of 11.1 billion baht ($332 million) for the first half of 2021, a noticeable increase compared to a net loss of 28 billion baht ($838 million) in H1 2020. Such results come largely due to expense reduction and work process adjustments as part of its business rehabilitation plan.
Thai Airways disclosed that out of 11.1 billion baht earnings, 8.6 billion baht ($257 million) came only from the airline's restructuring measures. The Central Bankruptcy Court of Thailand gave the final go-ahead for Thai Airways’ rehabilitation plan on June 15, 2021.
The court-supervised rehabilitation consists of major business and financial reorganization. The business reorganization plan includes a revenue increase plan, expense reduction, work process adjustment, and organizational restructuring to sustainably increase efficiency. Financial reorganization, on the other hand, includes debt and capital restructuring.
According to rehabilitation law, Thai Airways must fully implement the rehabilitation plan in five years once it is submitted and approved by the Court, unless the Court grants an order for extension.
The rehabilitation plan was seen as fundamental for the airline that has been reporting losses since 2013. It also helped the flag carrier avert bankruptcy and saved it from furloughing its entire workforce.
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