The Thailand government will give up its controlling stake in Thai Airways as it has approved a financial restructuring for the cash-strapped airline through bankruptcy protection.
It has made a loss in six of the last seven years and its financial health has only got more perilous since the global Covid-19 pandemic
"We have decided to petition for restructuring and not let Thai Airways go bankrupt. The airline will continue to operate," Prime Minister Prayuth Chan-ocha told reporters.
"The Cabinet also agreed the government will reduce its holding in Thai Airways to under 50%, ending the airline’s status as a state-enterprise," said transport minister Saksayam Chidchob.
Its restructure will be handled through the Central Bankruptcy Court, allowing the airline to operate as usual and retain staff for the time being.
Part of the restructure plan will see a shrinking of its fleet over time which may lead to a future downsizing of the workforce.
For now its few assets are protected from creditor demands although it is mulling whether it will need to seek bankruptcy protection overseas.
Limited domestic flights have restarted in Thailand but international services are still grounded until the end of June due to the pandemic.
