Thai Air seeks $1.5 billion to keep flying as tourists return

Thai Airways International Pcl plans to raise as much as 50 billion baht ($1.5 billion) in new capital as the flag carrier expands flights with the country reopening its borders to foreign tourists.

The airline will borrow 25 billion baht from existing creditors and other financial institutions, said Piyasvasti Amranand, a member of the panel overseeing a court-monitored debt rehabilitation plan. It is also seeking 25 billion baht from the government, its biggest shareholder, he said. 

“Our biggest problem is liquidity. We need cash to run our operations,” Piyasvasti told a press briefing Monday. “We have emphasized the need for new capital to creditors. We are confident that Thai Air’s earnings will rebound sharply with big profit after the Covid-19 pandemic passes.”

Thai Air is betting on the return of foreign visitors to the tourism-reliant country to help it emerge successfully from the court-mandated restructuring of at least 170 billion baht of debt. The airline has frozen loan payments and delayed bond repayments under the court approved plan after the pandemic-triggered collapse in global travel deepened losses at the airline to a record. 

The airline expects to secure loans from domestic financial institutions as early as December and start using the fund as working capital from January, Piyasvasti said. The company has properties to back up the new loans, which is needed to achieve the debt rehabilitation plan, he said.

New lenders to Thai Air will also have a right to buy its shares at 2.54 baht a share, a steep discount to its 10 baht par value, allowing them to benefit when Thai Air returns to profit, Piyasvasti said. The financial support from the government still lacks “clarity” because of the restrictions and political concerns, he said. 

The airline will continue to implement cost-cutting measures after reducing the number of its employees by more than half since 2019, Piyasvasti said, adding personnel costs have dropped to about 660 million baht per month from 2.68 billion baht two years ago.

Thai Air plans to shrink its fleet-size to 58 aircraft from more than 100 pre-Covid and it aims to add about 8 billion baht in cash from disposing of 42 planes, Piyasvasti said. The company expects to return to profit in 2023, he said.