Debt-ridden Thai Airways International Pcl expects to exit its rehabilitation plan ahead of schedule and is shopping for new planes as the recovery in global tourism bolsters earnings.
(Bloomberg) — Debt-ridden Thai Airways International Pcl expects to exit its rehabilitation plan ahead of schedule and is shopping for new planes as the recovery in global tourism bolsters earnings.
Thailand’s state-controlled carrier will be able to leave its court-supervised debt plan “much earlier” than a late-2024 target, Chief Executive Officer Chai Eamsiri said Thursday. The company is also in talks with plane makers including Boeing Co. for “long-term” acquisitions of new aircraft to modernize its fleet, he said.
Revenue will grow by at least 40% this year, said Chai, who was promoted to CEO at the start of the month. The carrier is in the midst of a $5.3 billion debt rehabilitation plan, having already undertaken painful cost cuts including halving its workforce and downsizing its fleet by about 40%.
But with global tourism springing back to life faster than expected as the world moves on from pandemic restrictions, Thailand has seen its position as a major travel destination accelerate since the second half of last year. To cope, Thai Airways plans to bring back into service some planes it previously aimed to sell.
“Thai Airways earnings will enjoy another year of excellent growth, with the return of Chinese travelers adding to an already hot market for air travel,” Chai told a press conference. “We have met most conditions in the debt plan quite quickly, and now begins our long-term growth program that includes new plane procurement and fleet modernization.”
Thai Airways has been in talks with plane makers over the addition of about 20 twin-aisle passenger jets, Bloomberg News reported in December. Those discussions include ones with Boeing over acquisition of 787-9 wide-body aircraft.
Thai Prime Minister Prayuth Chan-Ocha now expects foreign-tourist arrivals to exceed 30 million in 2023, though other government agencies still forecast about 25 million. In any case, international visitors will far exceed last year’s tally of just over 11 million, spurred by the lifting of the Covid-Zero policy in China, Thailand’s largest market before the pandemic.
Read More: Thai PM Sees Foreign Tourist Arrivals Topping 30M in 2023
The airline is still in talks with creditors and investors about plans for debt-to-equity conversion and additional share sales, two key conditions for improvement of equity capital, said Chai, declining to specify timing. The airline had a negative-equity base of more than 70 billion baht ($2.1 billion) as of Sept. 30, he said.
Thai Airways obtained regulatory approval to increase its registered capital to 336.8 billion baht from 21.8 billion baht by issuing new stock, it said in November. The airline, which has more than 30 billion baht of cash, is also in no rush for new loans of about 25 billion baht that are specified in debt-restructuring plan.
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