Thai Airways might be headed for bankruptcy.
The airline, which turned 60 years old on May 1, 2020, has suspended all flights until at least May 31.
The national airline and Star Alliance member has seen total losses of some US$778 million (S$1.11 billion) over the past three years.
The Covid-19 crisis has only compounded its downfall.
Thailand’s Finance Minister Uttama Savanayana had already suggested the government is open to seeing Thai Airways file for bankruptcy.
The government is a 51 per cent shareholder.
"Time has run out, Thai Airways must change," Savanayana said.
"Conventional practices cannot continue. There must be a massive overhaul."
A bankruptcy filing would allow the airline to embark on a "rehabilitation" plan, which will be the order of the country's bankruptcy court.
This is seen as a better solution than taking a short-term government bailout loan of US$2.8 billion.
Filing for bankruptcy does not mean that Thai Airways will dissolve or disappear.
Reuters reported that the Thai government "plans to go to bankruptcy court to submit a rehabilitation plan for its national carrier".
The restriction would see Thai Airways reducing its fleet and retiring older or larger aircraft, such as the Boeing 747 and Airbus A380.
Airlines around the world have also made similar moves.
Thai Airways has already planned to retire seven Boeing 747-400 jumbo jets by 2024, plus a dozen Boeing 777-200 and 777-300 jets.
The Boeing 777-300ERs and the newer more fuel-efficient Boeing 787s and Airbus A350s will remain in service.
There are no new aircraft on order.
Waved off news as rumours
However, Thai Airways on May 18 indicated that reform plans are still underway and dismissed recent bankruptcy rumours.
It said in a statement that reflected a clarification submitted to the Stock Exchange of Thailand (SET): “[Thai Airways] has clarified that it has no intention to file for bankruptcy, responding to rumours [that] appeared in the news and online about the consensus of its board of directors meeting on 15 May 2020 to file for bankruptcy.”
“Thai’s reform plan has been approved by board of directors on 17 April 2020 and presented to the State Enterprise Policy Office for consideration on 29 April 2020. The plan will soon be presented to the cabinet for further action. The board of directors had no resolution of filing for bankruptcy as appeared in the news.”
Top photo via Wikipedia