The embattled national carrier – Thai Airways International Plc (THAI), has come out to say that it was starting to see a turnaround of its business as passenger traffic starts to revive, after 2-years of restricted travel.
THAI came out to say that its performance during the course of this year and next is set to witness a turnaround as its load factor has seen a sharp increase.
“The trend for the remaining 2 quarters is expected to be better than the target,” Chai Iamsiri, the head of finance and accounting for the embattled airline said during the presentation at the ‘Opportunity Day’ at the Stock Exchange of Thailand (SET).
He added that for the time being the continued decline in oil prices has also helped the airline keep its costs lower.
Chai said that THAI was expecting around 4.5 million passengers during the course of this year and an average cabin factor of 80-82%. During the 2nd quarter of 2022 the airline had seen just over 2 million passengers and a cabin factor of about 60.3%, while it is expected that during the rest of the year, the trend of transportation and passengers will continue to improve.
As for the company’s ongoing rehabilitation from the bankruptcy, Chai said that the hope was that the revised plan would be approved by the courts within October this year.
The rehabilitation plan administrator has submitted to the official receiver. It is expected that the Central Bankruptcy Court will summon the plan administrator to clarify on September 21-22. If there is no problem, it is expected that the Court will have an order approving the plan to be revised according to the resolution of the meeting of creditors within the first or second week of October 2022.
After that, the debt restructuring process will begin. And convert debt to equity including increasing capital in the future.
As for the capital raising, it will take place at the appropriate time for the capital markets to be able to absorb the funding. The shareholding of the Ministry of Finance would be diluted to 34% from about 44.8% and there will be a debt-to-equity swap for the creditors. The offering price would also be around 2.52 to 2.54 Baht a share.
The company expects to exit its rehabilitation plan by the end of 2024 and expects positive earnings before interest, tax, depreciation, and amortization (EBITDA) and capital base would be back in the black.
Chai said that the global airline industry is not set to return to profitability up until next year after the Covid-19 induced lockdowns left the industry with more than US$ 140 billion in losses to the entire airline industry across the world.
Once this is done, it would be positive for the airline and for the shareholders and creditors because currently THAI is indebted with more about 140 billion Baht to various creditors.
