Thai Airways International planes at Suvarnabhumi airport. (File photo from Bangkok Post)
Kla party leader Korn Chatikavanij warned the government to keep politics away from Thai Airways International Plc (THAI) debt relief and not seek to revert the airline to its former status as state enterprise.
On Facebook, the former finance minister said he was disappointed with the options proposed by the finance ministry to ease the airline’s financial situation. One option was to inject 25 billion baht to recapitalize the carrier and secure new loans worth an additional 25 billion baht.
The second option was to guarantee a loan worth 50 billion baht if the government pulled out of the recapitalization.
The loan guarantee would be financed from the state budget, meaning that THAI would effectively be re-established as a state-owned enterprise. The airline lost its public ownership status last year when the ministry decided to reduce its stake to less than 50% of the total, in order to ease the debt rehabilitation process.
Mr Korn said if the airline returned to profitability in the future, the government would likely not be able to recover the money it pays the company. In effect, any profit would be divided and most of it would go to creditors.
What needs to be done is that negotiations take place with the creditors to reduce the debts. Without the debt being negotiated, THAI is unable to raise new funds from investors, which is why it is coming back to demand an infusion of funds from the government, according to the former finance minister. When the government decided not to bail out the financially troubled carrier last year and then let it go through the debt restructuring process in the central bankruptcy court, most people agreed with the decision. because they were hoping that THAI would come out of rehab as a professionally run company. profitable business, Korn said. He added that being a private airline, it would also be immune to interference from political office holders and the military. Airline board members are known to include senior officers, most of whom have served in the Air Force.
“The government must affirm that no politician or civil servant will ever again be able to exert his influence on THAI,” he said.
Mr Korn also suggested that if new public funds were pumped into THAI, there should be more money invested in the airline by private companies.