airline

Thai Airways files for bankruptcy protection and ticket holders will have to wait six months for refunds

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Industry News: 1st June 2020

Thai Airways has filed for bankruptcy protection and ticket refunds will take at least six months, according to industry observers.

Its fleet has been grounded since late March and there are thousands of passengers waiting for refunds of their tickets. But under Thai law bankruptcy protection, also known as Debt Rehabilitation will leave ticket holders with a long wait.

The airline begin a programme of replacing its aging 80 aircraft fleet two years ago but has been debt laden for years. It has 74 international destinations.

Thai Airways website has been updated to reveal its regional operator THAI Smile goes back into service this week, serving some domestic routes. Thailand has escaped the worst of the pandemic idetfying its first case in January – a woman from Wuhan province in China – in early January.

But despite some criticism of the government there have been just over 3,000 confirmed cases and 62 deaths. And even though some observers suspect these figures are an underestimate, the country has certainly escaped quite lightly. International arrivals from all destination were finally implemented on April 3, 2020.

In October 2019, Thai Airway’s had a debt burden of 300 billion baht (about US9bn) prompting a deputy transport minister to ask ‘how serious the airline’s executives were in dealing with the worsening financial situation?’[46] Thai reported a net loss of 4.68 billion baht (US$147m) in the third quarter of 2019 and a 10.91 billion baht (US345mn) net loss for the first nine months of 2019.

Thai’s president offered support saying: ‘Such losses were normal for airlines amid fierce competition and price dumping to win customers.”

 
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German government gives Lufthansa €9 billion bailout

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Industry News: 26th May 2020 The German government threw Lufthansa (LHAG.DE) a 9 billion euro ($9.8 billion) lifeline on Monday (25 May), agreeing a bailout which gives Berlin a veto in the event of a hostile bid for the airline. The largest German corporate rescue since the coronavirus crisis struck will see the government get a 20 per cent stake, which could rise to 25 per cent plus one share in the event of a takeover attempt, as it seeks to protect thousands of jobs, according to a report by the Reuters news agency. Lufthansa has been locked in talks with Berlin for weeks over aid it needs to survive an expected protracted travel slump, with the airline wrangling over how much control to yield in return for financial support. Germany’s central government has spent decades offloading stakes in companies, but remains a large shareholder in former state monopolies such as Deutsche Post and Deutsche Telekom. Berlin also still has a 15 per cent holding in Commerzbank (CBKG.DE), which it took on during the global financial crisis. Other airlines including Franco-Dutch Air France-KLM (AIRF.PA) and U.S. carriers American Airlines (AAL.O), United Airlines (UAL.O) and Delta Air Lines (DAL.N) have also sought state aid after the coronavirus hit global travel. Germany’s Finance and Economy Ministries said on Monday that Lufthansa, whose shares closed up 7.5 per cent at 8.64 euros, had been operationally healthy and profitable with good prospects, but had run into trouble because of the pandemic.

 

 
 
 

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