Thai Airways may need government financial assistance

If conditions do not improve, it is possible that Thai Airways International will have to borrow as much as Bt19 billion in 2009 to boost its liquidity.

“We may need assistance from the Finance Ministry,” said airline chairman Surachai Thansit-pong on Monday.

The board of Thailand’s national carrier recently gave its approval for Bt10 billion in long-term borrowing, mainly for the refinancing of short-term debts coming due during February and March. Some of the funds will be used for working capital.

Surachai noted that Thai Airways would have to revise its business plan and also raise funds for the refinancing of short-term debt and to increase its liquidity, citing the sharp decline of passenger traffic during this high season as the main reason.

In December and January, passenger traffic fell by over 30 per cent, compared with the same period 12 months previously, and some of the decline is attributed to the week-long seizure of Bangkok’s Don Mueang and Suvarnabhumi airports by anti-government protesters in late November.

Last week, Thai Transport Minister Sophon Saram informed the Thai Airways board that it would need to reduce benefits provided to directors and employees in order to return to profitability. Some of the benefits involved include free first-class tickets given to directors and steep discounts provided for employees and their relatives on ticket prices.

Thanks to nationmultimedia.com for the above quotes, for more information on this article please visit their website.

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