BANGKOK -- Thai Airways International's turnaround plan is expected to receive court approval in mid-2021, at which time the flag carrier could proceed with debt restructuring, cost cutting and coronavirus-related projects designed to bring new revenue.
The plan being devised by the airline covers haircuts on company debt as well as the new revenue initiatives over the next few years, said Chansin Treenuchagron, acting president.
Thai Airways became one of the most prominent Asian corporate victims of the coronavirus pandemic this year as flights into and out of Thailand were frozen by the global travel restrictions. Now, the carrier is looking for the light at the end of the tunnel.
"Since the COVID-19 remains and the number of passengers is very low, we are trying to generate revenue from cargo flights," Chansin said.
"All projects are in the plan, which is due to be submitted for the court approval in April to May next year. That will make the plan immediately effective, and we are ready to start our job if the court approves the plan."
The country's Central Bankruptcy Court accepted Thai Airways' request for rehabilitation in September. The court-supervised restructuring will boost the airline's creditworthiness, but the carrier still must generate funds to carry it through the rehabilitation.
The sharp fall in passengers due to the COVID-19 pandemic slashed the company's fleet by 26%, with 17 to 25 aircraft operating. But rising demand for cargo flights is expected to lift the number of planes to 45 in 2021. The fleet is due to reach 75 in 2025.
Nond Kalinta, the company's acting executive vice president, said Thai Airways has conducted cargo flights to 25 to 35 cities this year since COVID-19 regulations were relaxed beginning in June, earning around 45 billion baht ($1.49 billion) so far. Cargo flights are projected to reach about 80 cities and generate around 135 billion baht in 2025.
The airline hopes to gain more revenue amid the pandemic, Nond said, including with flights carrying vaccine for Thailand and other clients in Southeast Asia.
Nond said Thai Airways owns refrigerated containers that can store vaccine at minus 20 C, matching the requirement for some vaccines. The company also has a logistics partner to help transport vaccine directly from airports to hospitals.
"Not only vaccine, but we can set up flights carrying specific medicine to our clients," Nond said, generating revenue in a time of few passenger flights.
The carrier's net loss for the quarter ended in September totaled 21.5 billion baht, widening from 4.6 billion baht in the year-ago period. Thai Airways recorded a net loss of 49.5 billion baht for the nine months through September.
Cash and cash equivalents shrank to 11.1 billion baht as of Sept. 30 from 21.6 billion baht at the end of 2019. The carrier had recorded negative cash flows from operations and investment and financial activities.
Thai Airways also is working to raise cash apart from the debt restructuring plan. The company put 34 passenger aircraft from its fleet up for sale, following measures such as introducing an early retirement scheme and franchising its popular deep-fried dough sold at the airline's food outlets.