Thai Airways employees' jobs safe for now, says management

Aviation Updates Philippines – The management of Thai Airways International (THAI) assured employees that they will not be losing their jobs in the near future, amid growing concerns over plans to downsize operations to keep the struggling carrier afloat.

In a televised meeting held at the THAI's headquarters last Thursday (June 11), acting president Chakkrit Parapuntakul said that job cuts are not to be expected for at least a year while the Thai Central Bankruptcy Court looks into the airline's restructuring plan, which was approved by the Thai government last month.

"We receive a lot of questions about layoffs and I can assure that the employment status of the staff remains intact. There will be no layoffs, for the time being, as we have to wait for a clear reorganization plan. Once it is ready we'll know how many jobs will be retained. Then we will come up with plans and remedies. It will take at least a year before we reach that point," he said.

According to Parapuntakul, it would take the court around three to five months to vet the restructuring plan. 

In the meantime, THAI would have to stick to a six-point strategy to help improve the company's finances. This includes measures such as downsizing fleet, cutting unprofitable routes, reorganizing the company, increasing investment in cargo and catering services, updating employee welfare benefits and reducing costs, as well as revamping ticket sales. 

If the strategy is implemented properly, the airline can expect a recovery within five years. Massive layoffs may also be unnecessary if the restructuring results in a clear business direction for the airline.

Parapuntakul added that THAI management is currently in the process of negotiating with creditors, including aircraft lessors and trading partners. He also asked staff to do their best in helping the airline reduce costs.

Parapuntakul explained that though the airline no longer has any problems with liquidity due to cost-cutting measures, cash flow remains a challenge. To combat this, employees may need to have their salaries cut voluntarily.

THAI, which celebrated its 60th anniversary this year, had been experiencing financial woes long before the COVID-19 pandemic. It reported financial losses between 2013-2015, and again from 2017-2019. It also currently has a debt of around 242 billion baht ($7.8 billion).

Last April, the Thai government announced a $1.8 billion bailout fund to save the airline but instead decided to pursue a plan to restructure it while under formal bankruptcy protection. 

Shortly after the restructuring plan was announced in May, the Thai government sold a 3.2% stake in THAI to a mutual fund run by the Krung Thai Bank PcL. The sale reduced the government's stake to 47.68%, stripping the airline of its status as a state-owned enterprise. This, however, gives the airline access to more protections and provisions under Thai laws.

Photo by Julian Herzog