BANGKOK — Thailand’s government said on Monday that loss-making national flag carrier Thai Airways International will be restructured in a bankruptcy court, in the latest sign of how the coronavirus pandemic has swept through the airline industry.
“Thai Airways will enter a rehabilitation process under the court,” said Thailand’s Prime Minister Prayuth Chan-ocha after a cabinet meeting on Tuesday. “This is my decision and the cabinet’s,” he added.
The process to put the airline under the bankruptcy court’s supervision was finalized on Monday in the State Enterprise Committee, which oversees policies for state-owned enterprises. Prayuth chaired the meeting. Thailand’s Ministry of Finance owns 51% share of the national flag carrier.
In the meeting, the committee retracted its earlier resolution to grant a short-term loan backed by the Finance Ministry.
“The prime minister has stressed the need to make the public understand that this is not about entering bankruptcy, but undergoing a process of rehabilitation,” said government spokesperson Narumon Pinyosinwat on Monday. Thailand’s bankruptcy law covers both bankruptcy proceedings and rehabilitation proceedings.
Thai Airways’ fleet was grounded after the coronavirus outbreak, limiting its revenue-generating opportunities, and the carrier had already asked staff to take unpaid leave or reduced wages.
On Monday, Thai Airways said it would not resume its international flight operations until June 30, after the Civil Aviation Authority of Thailand extended its landing ban for international flights for another month.