Five years after Thai Airways International filed for bankruptcy protection, the national carrier’s court-appointed debt administrator, Piyasvasti Amranand, is planning an aggressive international expansion.
Called out of semi-retirement in 2020 by then-Prime Minister Prayut Chan-o-cha, Dr Piyasvasti was asked to take the controls of the airline and devise a rescue plan after the carrier had posted losses every year from 2013. THAI aims to emerge from debt restructuring this year and anticipates the resumption of trading on the Stock Exchange of Thailand in the second quarter.
Sounder financial footing allowed THAI last year to order 45 Boeing aircraft with an option for 35 more. Flight capacity has been increased.
‘Rapid turnaround’
“Thai Airways’ rapid turnaround is quite astonishing,” said Weera Wongsan, president of Federation of Savings and Credit Cooperatives of Thailand, which invests in the airline’s bonds and stocks. “Most lenders were prepared for a much longer and more painful recovery timeframe.”
The turnaround is reflected in the airline’s earnings and global surveys that show its image and service ranking improving. Thai Airways posted net profit of 15.2 billion baht in the first nine months of 2024, adding to a 28-billion-baht profit in 2023 — a rebound from a record loss of 141 billion in 2020 when the Covid pandemic grounded most of its planes.
“The debt rehabilitation accomplishment and earnings jump has significantly strengthened Thai Airways’ finances, which has allowed it to return to aggressive expansion mode,” Dr Piyasvasti, a 71-year-old economist, said in an interview as industry executives gathered in Singapore on Tuesday for the Aviation Festival Asia to discuss sustainability, artificial intelligence and passenger loyalty. THAI is now positioned to take advantage of the post-pandemic travel boom, he said.
THAI expects its fleet to jump to 143 aircraft in 2029 from 77 as of September 2024, according to a November presentation. It expects to expand routes to Europe, China, Australia and other international destinations. THAI forecasts that by 2029, it will carry about 35% of total passengers travelling through Suvarnabhumi International Airport, up from about 26% last year.
Still, as post-pandemic pent-up air travel demand slows amid more seat capacity, that “increased competition has pulled down ticket prices”, said Tiwa Shintadapong, president of the Investors Association of Thailand.
THAI is plotting an expansion course sooner than creditors thought it could, said Somboon Sangrungjang, a lawyer at Kudun & Partners Co and an adviser on the carrier’s creditors’ committee.
At the heart of the recovery plan for Thailand’s largest corporate debt crisis was the dismissal of more than half of its 28,000 employees in exchange for about 50 billion baht of new loans and cash, according to Dr Piyasvasti, who was the carrier’s president from 2009 to 2012.
The airline’s total employee eadcounth fell to about 13,000 in 2021 before rising to almost 17,000 last year, according to a company presentation. It also sold about 30% of its aircraft in four years through 2023.
“It was a difficult decision to dismiss a large group of our colleagues, many of whom had been with the company for a long time,” said Dr Piyasvasti, who as head of the three-member debt administrator team has final say on company decisions. “But that was the very last option to ensure the survival of the company and remaining employees.” (Story continues below)
“The debt rehabilitation accomplishment and earnings jump has significantly strengthened Thai Airways’ finances, which has allowed it to return to aggressive expansion mode,” says Dr Piyasvasti Amranand, who oversaw the process. (Photo: Thai Airways)
Airplane restaurant
Dr Piyasvasti also raised cash by selling the airline’s properties and other assets. The move included launching a Bangkok restaurant resembling an airplane that serves in-flight meals. It also generated revenue by allowing people to experience flight simulations.
THAI has just completed its 76-billion-baht capital reorganisation through a debt-to-equity swap with creditors and a new rights offering. The fresh cash helped turn the shareholders’ equity into a surplus, allowing the airline to seek the court’s permission for a debt plan exit in the second quarter, according to Dr Piyasvasti.
Dr Piyasvasti, who has a PhD from the London School of Economics, tapped his previous corporate turnaround experience to pilot Thai Airways out of trouble.
In 2009, during his first stint with Thai Airways, Dr Piyasvasti pulled the carrier out of financial trouble amid a surge in fuel costs during the global economic slowdown. A year later, it reported a record net income after what at the time was a historic losses in 2008.
He oversaw the restructuring of the country’s power and oil industry when he served as energy minister two decades ago and then as chairman of PTT Plc, the country’s largest oil company. He orchestrated the listings of PTT and state-controlled power producer Electricity Generating Plc.
Dr Piyasvasti, who is also president of the Ski and Snowboard Association of Thailand, indicated he plans to step back a little from his intense involvement in THAI after the debt rehabilitation exit.
“I will not work any full-time job any more after this,” he said. “I already have had enough after a very tough and demanding time here.”