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Thai Airlines Crisis Now Receives US$187 Million Cash Injection

Image courtesy of Thai Airways

The Export-Import Bank of Thailand (EXIM Thailand) has allocated 6.2 billion THB baht (about US$187 million) to support 5 Thai airlines (Thai Airways International, Thai Smile, Thai AirAsia, Thai VietJet Air, and Bangkok Airways) to help them survive the crisis caused by the COVID-19 pandemic.

The amounts received by each of the beneficiary airlines are not known at the moment, but the bank’s president, Rak Vorrakitpokatorn, said the support includes THB 3.5 billion (US$105.5 million) in debt relief and another THB 2.7 billion (approximately US$81.5 million) in additional credit lines to preserve liquidity and staff.

After the shock of the first year of the pandemic, the Thai airline industry slowly began to recover in the fourth quarter of 2021.

This was thanks to the relaxation of restrictions on entering the country and the arrival of the first tourists. However, the reintroduction of stricter rules in mid-December in response to the Omicron variant has again thrown uncertainty over the already fragile recovery of many airlines.

Like that of Thai Airways, for example, the Thai flag carrier filed for bankruptcy protection in May 2020, due to more than US$3 billion in debt. In September 2020, Bangkok’s central bankruptcy court ordered the airline to undergo a corporate restructuring program, which continued throughout 2021.

In October 2021, the trustees presented a progress report on the implementation of its restructuring process, highlighting that US$39.09 million in debt had already been repaid to creditors and that debts will continue to be paid in accordance with the plan approved in June by the bankruptcy court.

Even in Italy, however, the company has had problems, having opened a collective dismissal procedure that involves 21 employees out of a total of 31 in the 2 major Italian airports of Rome and Milan.

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Mario Masciullo - Special to eTN

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