Like many other airlines around the world, Thai Airways was hit hard by the travel restrictions put in place to stop the spread of COVID-19. To ensure its liquidity, the airline wants to obtain an emergency loan, guaranteed by the Thai Ministry of Finance.
The emergency loan would amount to $1.8 billion (THB58.1 billion), reported Reuters. Approved by the Ministry of Finance, the proposal is set to appear before the Cabinet of Thailand next week.
Thai Airways plans to raise $2.3 billion (TBH77 billion) of capital in November 2020 by issuing new shares in order to return the loan, pay off the interest and have enough cash to continue its operations. The airline indicated that it would trim its fleet to 84 aircraft by 2024 and reduce the number of cockpit types from seven to six in order to reduce its costs.
Currently, the airline operates an all-wide-body fleet that includes six Airbus A380 and seven Boeing 747-400 aircraft, amongst other aircraft types. It’s subsidiary Thai Smile flies using 20 Airbus A320 narrow-bodies.
The national flag carrier of Thailand has exhibited signs of struggle prior to the coronavirus crisis, as it was unprofitable since 2017. The latest financial data indicated that Thai Airways ended 2019 with a net loss of $371 million (THB12 billion) and had $667 million (THB21.6 billion) of cash reserves.
Since March 25, 2020, the airline was forced to gradually suspend its domestic and international services. While Thai Airways has not indicated when it plans to resume flights, its competitors in Thailand, Thai AirAsia and Thai Lion Air, are set to resume flights starting May 1, 2020.
