Thai Airways lurches towards bankruptcy as coronavirus keeps flights grounded
Thailand's state-owned carrier Thai Airways appears a step closer to a bankruptcy reorganization as the airline remains grounded amid the coronavirus pandemic.
The government body overseeing state-run companies, the State Enterprise Policy Committee, agreed on Monday that the airline should reorganize, according to numerous reports. The plan would see the carrier reorganize and presumably return to flying as opposed to going out of business and liquidating.
In a statement, Thai Airways only confirmed that the committee would vote on a rehabilitation plan.
With a reorganization filing, Thai Airways would join the likes of Avianca and Virgin Australia as prominent airline victims of COVID-19. Avianca filed for Chapter 11 bankruptcy in the U.S. earlier in May and Virgin Australia entered the country's equivalent of restructuring in April.
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The International Air Transport Association (IATA) has warned that as many as half of the world's airlines could be casualties of the crisis, be it restructure, disappear or merge with another carrier.
A member of the Star Alliance, Thai Airways is a popular choice for award travel and is known for its customer service and connections to its home country's numerous sites. The airline maintains a large base at Bangkok's Suvarnabhumi International Airport (BKK).
However, the airline's flights have been grounded since April 4 as part of the Thai government's response to the coronavirus. The grounding was recently extended to June 30.
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Thailand's borders have been closed since late March, and the country remains under a state of emergency.
Already in a weak financial state prior to the crisis, a bankruptcy would likely allow Thai Airways to accelerate the restructuring efforts that were previously underway.
Low-cost carriers, including Nok Air and Thai AirAsia, dominate Thailand's domestic market. Thai Airways and its low-cost subsidiary Thai Smile only had a third-place 17% share of domestic seats in 2019, according to Cirium schedules.
Thai operated 103 aircraft at the end of 2019. Its fleet included six Airbus A380s, 10 Boeing 747-400s and 20 Boeing 777s.