Thai Airways Set To File For Bankruptcy

Government spokeswoman Narumon Pinyosinwat has confirmed the plan for Thai Airways saying that the airline is expected to file for bankruptcy tomorrow.

“The State-Enterprise Planning Office has decided, in principle, to rehabilitate Thai Airways in court. The method will be addressed to the Cabinet today (Tuesday).

The carrier will file for Chapter 3/1 of the Corporate Reorganization section of the Bankruptcy Act which is equivalent to Chapter 11 US bankruptcy.

The government has reportedly agreed that the national carrier must begin restructuring proceedings in the bankruptcy court. The move includes filing a restructuring petition by the airline itself, by the government agency, or by creditors who owe more than 10 million baht.

If the plan is accepted, Thai Airways would be protected from creditors who take legal action to recover payment. It is understood that the Thai government will offer more than 58 billion baht in a combination of loans and direct cash to the hard-hit carrier.

Despite the reported confirmation, the airline has denied rumours of bankruptcy and said, “The proposal will soon be forwarded to the Cabinet for further action. As reported in the press, the Board of Directors made no decision to file for bankruptcy. Thai Airways again denies the reports of bankruptcy.”

The airline also denied rumours that all former and present directors of the company, along with their family members, are entitled to life-long free first-class tickets.

“Thai Airways staff are not eligible for seven free tickets per year, as claimed, and members of the Board do not receive free first-class tickets. Airline workers have the same basic benefits and travel opportunities as those usually offered by airlines around the world.”

SOURCE: TTR Weekly | Reuters

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