THAI AIRWAYS LAYS OFF EMPLOYEES TO AVOID BANKRUPTCY

Thai Airways, Thailand's national carrier, filed for bankruptcy in May last year. The procedure provides for protection from creditors and large-scale restructuring. This time the press service of the organization announced a serious reduction of managerial positions - instead of 740, only 500 people will remain employed in the company.

The company has been facing financial difficulties since 2012, but the COVID-19 pandemic has made the situation even worse. Thai Airways, like many air carriers around the world, has cut capacity. Travel restrictions and falling demand have rendered many commercial routes unviable.

Over the past few years, the company has lost about $ 778 million, and its debt as of early May 2020 amounted to more than $ 2.8 billion.

A significant part of the company's debt (about 78%) falls on bond payments.

On May 19, 2020, the company was forced to apply to court and launch a bankruptcy protection proceedings similar to that provided for by the US law. Since the use of wide-body airliners has lost its relevance in the face of a reduction in tourist flow, and many aircraft were simply mothballed, the company announced its intention to get rid of a part of its fleet last week. The sale was supposed to affect all Airbus A380, Airbus A330 and Boeing 747 airliners.

However, that was not enough. Now the reduction will affect managerial positions. After the dismissal of 240 employees, the company's management plans to reduce the number of oversight levels from eight to five, thereby increasing its efficiency.

In order to implement such plans, the company needs to enlist the support of creditors.

The central bankruptcy court will consider the company's petition on March 2. It is expected that if creditors vote in favor of the plan, the company will be able to successfully emerge from bankruptcy by May. Otherwise, the procedure will be continued.

Changxing Trinuchagron, the acting president of Thai Airways, said that a successful restructuring would require the cooperation of all stakeholders, from employees to creditors. Now the company employs about 21 thousand people and continues to be an important link in the tourism industry of Thailand.