Bangkok-based Thai Airways Soars: Asian Expansion After Bankruptcy
Five years after entering bankruptcy protection, Thai Airways International (THAI) is charting a remarkable course toward recovery and aggressive expansion, orchestrated by court-appointed debt administrator Piyasvasti Amranand. Appointed in 2020 by then-Prime Minister Prayut Chan-o-cha, Dr. Amranand, a seasoned economist, was tasked with rescuing the national carrier, which had been mired in losses since 2013. The airline is poised to emerge from debt restructuring this year, with a targeted return to trading on the Stock Exchange of Thailand in the second quarter.
This resurgence is underpinned by a substantial order of 45 Boeing aircraft last year, with an option for 35 more, and a significant increase in flight capacity. This «rapid turnaround,» as Weera Wongsan, president of the Federation of Savings and Credit Cooperatives of Thailand (an investor in THAI’s bonds and stocks), describes it, has exceeded expectations. Many lenders had braced themselves for a considerably longer and more arduous recovery process.
The airline’s financial health has dramatically improved, reflected in both its earnings and improved global image and service rankings. THAI reported a net profit of 15.2 billion baht in the first nine months of 2024, building on a 28-billion-baht profit in 2023—a stark contrast to the record 141-billion-baht loss in 2020 when the COVID-19 pandemic decimated the aviation industry. Speaking at the Aviation Festival Asia in Singapore, Dr. Amranand described this financial strengthening as the catalyst for the airline’s renewed focus on aggressive expansion, capitalizing on the post-pandemic travel boom.
THAI’s ambitious plans include expanding its fleet to 143 aircraft by 2029, more than double its 77 aircraft as of September 2024. This expansion will encompass new routes to Europe, China, Australia, and other international destinations. The airline projects carrying approximately 35% of all passengers through Suvarnabhumi International Airport by 2029, up from about 26% in 2024.
However, the airline acknowledges the challenges posed by increasing competition in the post-pandemic travel market. As pent-up travel demand gradually subsides and seat capacity increases, ticket prices are facing downward pressure, according to Tiwa Shintadapong, president of the Investors Association of Thailand. This competitive landscape will be a key factor in THAI’s expansion strategy.
The cornerstone of THAI’s recovery plan, which addressed Thailand’s largest corporate debt crisis, involved difficult but necessary measures. Over half of the airline’s 28,000 employees were laid off, a move partially offset by approximately 50 billion baht in new loans and cash injections. This workforce reduction, while painful, was deemed essential to ensure the company’s survival, according to Dr. Amranand, who led the three-member debt administrator team. The airline’s employee count fell to approximately 13,000 in 2021 before recovering to nearly 17,000 last year. THAI also divested approximately 30% of its aircraft between 2020 and 2023.
Beyond workforce reductions, Dr. Amranand spearheaded innovative revenue-generating initiatives, including selling airline properties and launching a unique Bangkok restaurant designed to resemble an airplane, serving in-flight meals. The airline also offered flight simulation experiences.
THAI recently completed a 76-billion-baht capital reorganization through a debt-to-equity swap with creditors and a new rights offering. This infusion of capital restored the airline’s shareholder equity, paving the way for the anticipated exit from the debt plan in the second quarter.
Dr. Amranand, who holds a PhD from the London School of Economics, leveraged his extensive experience in corporate turnarounds, having previously steered THAI out of financial difficulties during his tenure as president from 2009 to 2012. He also has a distinguished track record in the energy sector, overseeing the restructuring of Thailand’s power and oil industry and orchestrating the listings of PTT Plc and Electricity Generating Plc.
Looking ahead, Dr. Amranand intends to step back from his intensive involvement with THAI after the debt rehabilitation exit, marking the culmination of a demanding and ultimately successful period of leadership.
