Thai Airways International (THAI) will exit rehabilitation earlier than planned and resume trading on the Stock Exchange of Thailand in two years as operating revenue is rising, says its new chief executive officer.
Chai Eamsiri said on Thursday that the cash flow of the airline had risen to about 30 billion baht, compared with just 6 billion baht in 2021, and it was expanding its fleet to meet the ongoing travel recovery.
“THAI is in the position of continuously increasing its operating revenue because the volume of air passengers is picking up,” Mr Chai said at his first news conference since being appointed CEO on Feb 1. With 37 years of experience in the aviation industry, he previously served as THAI's chief financial officer.
Revenue will grow by at least 40% this year, he said.
The national carrier entered bankruptcy protection last year to restructure some 400 billion baht worth of debt. It has since undertaken painful cost cuts, including halving its workforce and downsizing its fleet by about 40%.
“THAI has followed its recovery plan by reducing expenses and costs and selling unused assets,” Mr Chai said. “THAI’s crisis has passed and it is entering an era of steadily generating revenue for sustainable growth.”
The airline has resumed flights on 65% of its pre-Covid routes and its cabin factor was a healthy 85% last year, he added.
The airline started to make an operating profit last May, and its cash flow is at a very good level of about 30 billion baht.
Given the healthy cash flow, THAI will not need to borrow another 25 billion baht as earlier set out in its recovery plan, he said.
The airline would definitely exit rehabilitation sooner than late next year as earlier planned, and could resume trading on the SET in 2025, Mr Chai said
The focus now, he said, is firmly on revenue generation and better returns from cash in hand.
He estimated the airline earned about 90 billion baht in revenue last year and believed the figure would rise by 40% this year.
“Thai Airways’ earnings will enjoy another year of excellent growth, with the return of Chinese travellers adding to an already hot market for air travel,” Mr Chai said.
“We have met most conditions in the debt plan quite quickly, and now begins our long-term growth programme that includes new plane procurement and fleet modernisation.”
THAI currently has 49 planes and aims to expand its fleet to meet rising air transport demand. It will take delivery of six rented Airbus A350 jets in April and discuss leasing three more wide-body planes within this year or early next year, Mr Chai said.
The company is also in talks with plane makers including Boeing for “long-term” acquisitions of new aircraft to modernise its fleet, he added.
THAI is seeking to add about 20 twin-aisle passenger jets, Bloomberg News reported in December. The talks with Boeing focus on the 787-9 wide-body aircraft.
The Central Bankruptcy Court approved the airline’s recovery plan in September 2020 after the coronavirus pandemic grounded most of THAI’s fleet as borders gradually closed, bringing air travel to a halt.
The company's total liabilities stood at 338.9 billion baht against total assets of 298.9 billion baht as of Sept 30 that year.
THAI 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 Mr Chai, declining to specify the timing. The airline had a negative-equity base of more than 70 billion baht as of Sept 30, he said.
