Thai Airways Bankruptcy

[hhinner]

Could one (of many, I'm sure) problem be in the assets valuations? I mean how much is a used plane really worth in the covid world?

[PeteC]

Mismanagement, graft sank THAI, says panel

https://www.bangkokpost.com/thailand/ge ... says-panel

Mismanagement linked to dozens of executives and corruption have led to the downfall of Thai Airways International Plc, according to the deputy transport minister.

The looting of the national carrier reportedly included an instance of an employee in the repair and maintenance division claiming 419 days or overtime for 3 million baht in a single year.

Thaworn Senneam of the Democrat Party held a briefing on Friday to announce the findings of a panel set up to investigate what went wrong at the flag carrier, which has filed for business rehabilitation. The investigation focused on operations between 2017 and 2019.

THAI has lost money in every year but one since 2013 and now has outstanding debt of 250 billion baht. The Central Bankruptcy Court recently held three days of hearings on the airline’s rehabilitation plan and is scheduled to rule on the application on Sept 14.

Mr Thaworn said losses of at least 62.8 billion baht began in 2008 after the purchases of fuel-guzzling passenger jets for long-haul direct flights. He did not name names but Thaksin Shinawatra was the prime minister when the planes were procured starting on 2004.

The panel found the decision to buy 10 Airbus A340-500 and A340-600 jets led to dire consequences. Losses were recorded for every flight, from the maiden Bangkok-New York direct flight in 2005 to 2013, when the last plane in the fleet was decommissioned in August, Mr Thaworn said.

He also claimed to have evidence of bribes of at least 5%, or 2.6 billion baht, to politicians, officials and THAI executives in connection with the purchases.

The panel also found price differences of as much as 589 million baht in the operating leases for six Boeing B787-800 jets and two B787-900s.

The minister said the discrepancy stemmed in part from some 245 million baht in bribes paid by Rolls-Royce through middlemen to officials and THAI executives for the purchases of engine parts, and flat-rate payment for repair and maintenance services.

Other irregularities identified by the panel include a rise in employee expenses even as the number of employees fell. It did not specify the time period but said overtime pay for pilots and crew rose by 638 million baht. Overtime for repair and maintenance crew rose 530 million baht. Average monthly cash compensation for employees was 129,134 baht each.

In 2019, when net losses reached a record 12 billion baht, the overtime for repair and maintenance employees was 2 billion baht, with some staff recorded as working overtime more than 365 days a year.

The employee who received the most overtime payments claimed 3,354 hours, or 419 days, for 2.95 million baht, against an annual OT cap of 1,500 hours, even though his salary was 73,203 baht a month.

All told, 567 repair and maintenance employees exceeded the 1,500-hour overtime cap in 2019, costing the airline 603 million baht.

In 2017, the panel said, the commercial division sold tickets at very low prices, benefiting agents who enjoyed commission fees and incentives.

Executives of the commercial division also transferred people close to them to stations abroad and set sales targets to match the desired levels of incentives. After that, 10% of the incentives were deducted and put into an unregulated slush fund, from which commercial managers split the proceeds.

Among top executives, the panel found an acting president was paid special cash compensation of 200,000 baht a month. The amount tripled over nine months in violation of a cabinet resolution and a Finance Ministry prohibition against acting executives at state enterprises accepting more compensation than what they normally get. All told, the panel said, excessive compensation to executives cost the company 10 billion baht.

The panel also believes THAI was favouring a certain company by extending its right to sell tax-free inflight products by nine months instead of calling a bid, costing 655 million baht.

[Suua]

Mismanagement linked to dozens of executives and corruption have led to the downfall of Thai Airways International Plc, according to the deputy transport minister.

Like the rest of the country......corruption is so ingrained in society here, that is is accepted as normal behavior.
The country is going nowhere until its acceptance is reversed.

[Dannie Boy]

Mismanagement linked to dozens of executives and corruption have led to the downfall of Thai Airways International Plc, according to the deputy transport minister.

Like the rest of the country......corruption is so ingrained in society here, that is is accepted as normal behavior.
The country is going nowhere until its acceptance is reversed.

I completely agree, this may be a pretty big tip, but it’s only the tip of the iceberg leaving so much other unidentified corruption under the surface. But we all know that there’s little chance that anything will be done about it - too many people have too much to lose!!

[Lost]

... reportedly included an instance of an employee in the repair and maintenance division claiming 419 days of overtime for 3 million baht in a single year.

Hardworking chap! Could do with more folk like him.

[PeteC]

All posts about the Thai Airways bankruptcy should now go into this thread and not into any Covid-19 threads about Airlines or Companies that may go out of business due to Covid-19.

[oakdale160]

Is ANY farang saying--OMG what a loss, how I will miss them, how can they be replaced.

[Dannie Boy]

I’ve had visitors from the UK who have flown Thai - reason being, good times of arrival and departure plus reasonable pricing, however when flying from BKK to LHR, Thai are almost always the most expensive- often by a big amount


Sent from my iPhone using Tapatalk

[handdrummer]

Is ANY farang saying--OMG what a loss, how I will miss them, how can they be replaced.

Only those who may be losing income due to a spouse's unemployment.

[pharvey]

Well, seems that there is some hope - however, I do have some concerns over the wording "A 100% credit voucher for the full value paid to us" - what percentage of the payment I made are Thai Airways going to refund I wonder?! Will Thai Airways still be around in 12 months time? If so, what the hell will flight prices be....?

Anyways, certainly better than nothing.

Received today from the Travel Agent in the UK with whom I booked the Thai Airways tickets: -

"Your application has now been submitted to the airline/supplier and is awaiting approval from them.

Once we receive confirmation from the airline/supplier we will be in a position to offer you one of the following two options: -
1.A 100% credit voucher for the full value paid to us. This voucher is valid for use within 12 months from your original departure date and can be issued immediately once we have received approval from the Airline/supplier.

2.A cash refund. This process will take an extended period of time due to the speed and response of the airline/supplier, their internal process and the payment process that allows your funds to be returned to us as the agent. We do not currently hold your funds these are with the airline/supplier. A cash refund will incur a £50 transaction handling fee which is a small contribution to the costs incurred.

If you could please confirm which option, you would like to move forward with we will process your booking once we have received confirmation from the airline/supplier.

Due to the significant amount of applications at this time we request that you check back with us in 4-6 weeks. Please note it could take up to an additional 4-6 weeks to receive the payment from the airline/supplier after they give their authorisation."

[Dannie Boy]

Who did you book with = Thai direct or through a third party?

[pharvey]

Who did you book with = Thai direct or through a third party?

It was through a company called "TravelUp", an agency in the UK. All seemed good when booking, but reviews after the pandemic have been very bad. Delays in getting refunds, £50 charge etc, etc.

[PeteC]

Thai Airways sells five Airbus A340s stored away for 13 years

https://thethaiger.com/news/national/th ... r-13-years

Thai Airways (THAI) has found a buyer for five dusty Airbus A340s which have gone unused for 13 years. Thailand’s flag carrier has sold one A340-500 and four A340-600 planes for a total of 350 million baht.

The transaction is sure to help THAI on its road to financial recovery since the Bankruptcy Court approved a debt restructuring plan for the airline in 2020.

The buyer, whose identity remains disclosed, has already signed the paperwork finalising the deal, according to Chief Technical Officer of Thai Airways Cherdphan Chotikhun. The transaction will go through once it is approved by Thailand’s Minister of Transport, said Cherdphan.

Since Thai Airways entered its debt rehabilitation programme two years ago, the airline has sold 16 decomissioned planes. Before the most recent sale one A340-500 and four A340-600s, THAI sold one Boeing 737-400, and ten Boeing 737-400 planes, amounting to 2 billion baht.

Cherdphan admitted that the airline struggled to shift the decomissioned A340s and there are still four more aircraft of the same spec for sale. THAI is currently engaging in discussions with prospective buyers for the remaining four A340s, said Cherdphan.

“In the past, we were bound by regulations of state firms, which gave us almost no chance to sell the decommissioned planes. As a result, THAI had to shoulder the cost burden of the decommissioned planes for years.”

In 2019, Thai Airways declared 245 billion baht in debt. The airline’s progress report published in July this year revealed that revenue is finally taking off and the airline is navigating its way out of its mountain of debt.

The flag carrier hasn’t just made money by selling aircraft but also by auctioning off a variety of items on their car-boot style Facebook shop ‘TG Warehouse Sale.’ The airline made a good profit by auctioning away colourful aeroplane seats via Facebook Live.

THAI also made some profit by opening a pop-up restaurants serving in-flight meals during the Covid-19 era and by selling a variety of inflight items such as napkins, cups, and cutlery.

But it’s been cutting costs, not making sales, which has helped THAI get back on track. The airline has reduced its costs by an enormous 73%, from 29.4 billion to 7.9 billion baht per year, according to its July financial report. The airline has saved on maintenance costs, and operating costs and also halved its 30,000 strong workforce to 15,000.

SOURCE: Nation

[handdrummer]

"The buyer, whose identity remains disclosed?" Do they mean, undisclosed?

[Nereus]

Thailand’s flag carrier has sold one A340-500 and four A340-600 planes for a total of 350 million baht.

That amount is well less than scrap value. In fact, it is less that the president votes himself a bonus!
I doubt that the aircraft will ever be flown away, it would cost millions of dollars to make them airworthy again.
The disclosed-undisclosed buyer could well be a local scrap dealer, probably related to Thai Airlines hierarchy!

also halved its 30,000 strong workforce to 15,000.

This is the best thing that they have done, but for sure a lot of those "staff" will still be getting paid!