The Thai government has changed its mind on providing $1.8 billion state aid for the country’s flag carrier and instead will let the firm go bankrupt, according to Reuters.
Thailand’s State Enterprise Policy Committee has previously approved “in principle” the proposal to prop up the airline via a 58 billion Thai baht loan guarantee but it has now decided to let the company go into a Thai version of “Chapter 11” insolvency instead.
“The State-Enterprise Planning Office agreed in principle for the rehabilitation of Thai Airways in court... the procedure will be submitted to cabinet tomorrow,” government spokeswoman Narumon Pinyosinwat told Reuters.
Part of this restructure is expected to see Thai Airways reducing the size of its fleet and retiring older or larger aircraft such as the Boeing 747 and Airbus A380.
Thai has already planned to put its seven Boeing 747-400 jumbo jets out to pasture by 2024, along with a dozen Boeing 777-200 and 777-300 jets, while the Boeing 777-300ERs and the newer more fuel-efficient Boeing 787s and Airbus A350s were to remain. The airline has no new aircraft on order.