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BANGKOK, Thailand — Thai Airways International, Thailand’s loss-making flag airline, has begun a strategy to decrease its registered capital by 19 percent as part of a court-approved rehabilitation to repair its balance sheet. According to Suvadhana Sibunruang, the acting CEO, the company’s registered capital will be reduced from 26.9 billion baht ($822 million) to 21.8 billion baht ($822 million) by writing down unissued and unsold shares as part of its rehabilitation plan. The capital reduction is one element of the Central Bankruptcy Court’s rehabilitation plan, which was approved in June. The airline can decrease some of its accumulated losses and improve its financial situation by lowering its share capital. The company’s pre-COVID employment would be halved, and executive roles will be cut by 30%, according to the rehabilitation plan. As part of an assessment of its asset portfolio and to raise operating cash, the airline has also been selling off aircraft, facilities, and stockholdings. To return to competitiveness within three to five years, the corporation has stated that it will continue to downsize its personnel by nearly half and cut remuneration package expenses. Analysts, however, believe that will not be enough to fix the company’s battered balance sheet. The airline need a massive overhaul, as well as new money to keep it afloat during the five- to seven-year rehabilitation process. Large losses have been difficult for creditors to bear as part of the rehabilitation process. Thai Airways has only made yearly profits twice in the last ten years, and the rehabilitation program focuses on the airline’s non-profitable operations. Uncertainty in the airline industry is also a source of concern for some analysts. The COVID-19 epidemic, which has drastically reduced the number of passengers, contributed to Thai Airways’ financial loss of 141 billion baht in 2020. In 2020, it carried 76% fewer people and 72% fewer cargo by volume than the previous year, leading in a 74% decline in total operating revenue to 48.6 billion baht. By 2025, the airline’s rehabilitation strategy intends to return it to a profitable state. The flawless implementation of the air travel market’s rehabilitation and recovery is critical to meeting that goal./nRead More

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