Thai Airways plans to exit rehabilitation, focusing on capital restructuring, operational efficiency, and retaining profitability as a private company, aiming for equity positivity and fleet expansion by 2027.
Key Points
- Rehabilitation Phase and Progress: Thai Airways is set to exit its rehabilitation phase by next year, focusing on capital restructuring and operational efficiency. Significant workforce reductions and an increase in fleet size from 79 to 100 aircraft by 2027 are part of the plan, alongside achieving an EBITDA of at least 20 billion baht annually.
- Capital Restructuring and Stock Market Plans: The airline plans to issue bonds to raise 80 billion baht, converting debt into equity. A stock market listing is anticipated, with filings to the Securities and Exchange Commission (SEC) planned by September 30, aiming for stock trading to resume in Q2 2025.
- Transition to a Private Entity: Thai Airways will operate as a private entity, distancing itself from government influence. The airline is in discussions with potential international partners for share acquisition, emphasizing the need for skilled management to improve future operations and profitability.
Thai Airways International Public Co., Ltd. is on the verge of concluding its rehabilitation phase, significantly reshaping its operational and financial structure to solidify its status as a private entity. The airline’s Chairman of the Rehabilitation Plan Administrators, Piyasvasti Amranand, announced that the comprehensive restructuring, initiated due to severe financial challenges intensified by the COVID-19 pandemic, is geared towards fostering long-term sustainability and profitability.
The rehabilitation plan encompasses substantial organizational changes, including reducing its workforce from 30,000 to a more manageable 17,000 employees, in addition to streamlining its operations. One of the pivotal aspects of this plan is the expansion of its fleet, with a strategic goal to increase its operational aircraft from 79 to 100 by 2027. To successfully navigate this restructuring, the airline must fulfill four essential criteria: increasing its capital, ensuring consistent debt repayment over five years, achieving an EBITDA of at least 20 billion baht annually for two consecutive years, and appointing a new board in the event of shareholder changes.
Currently, Thai Airways is reportedly meeting its EBITDA targets and is actively working towards achieving positive equity status. Plans are underway to raise approximately 80 billion baht by issuing bonds and converting debt into equity, which would notably decrease the Ministry of Finance’s ownership stake from 48% to between 30% and 40%.
In anticipation of its reentry into the stock market, Thai Airways plans to file with the Securities and Exchange Commission and the Stock Exchange of Thailand by September 30, aiming for stock trading to resume in the second quarter of 2025. As part of this transition, Piyasvasti has emphasized the importance of governance free from governmental oversight and underlined the need for skilled management to avert previous operational pitfalls. The airline is also exploring partnerships with international entities within the aviation sector as part of its strategy to ensure ongoing profitability and adept debt management.
