$1bn rescue plan for ailing THAI
Flag carrier Thai Airways (THAI) said Thursday it had submitted a one-billion-dollar rescue plan to the government in a bid to turn its fortunes around after huge losses last year, AFP reported.
The struggling airline, in which the Thai government holds a majority stake, posted a loss of 21.3 billion baht ($592 million) last year, its first annual loss in 43 years.
The airline has suffered from high global fuel prices as well as domestic political protests that briefly shuttered Bangkok's airports in November and December last year.
Pichai Chunhavajira, chairman of the steering committee overseeing the plan, said the 35 billion baht was needed in two tranches to secure the airline's future.
"We submitted our plan... for their consideration. The first phase addressed immediate turnaround measures to solve the liquidity problem and restore confidence in the company," Pichai told reporters.
Thai Airways posted profits of 4.4 billion baht in 2007. The company has been seeking a bailout from the government for months but Finance Minister Korn Chatikavanij had insisted the airline submit a detailed recovery plan before receiving taxpayer funds.
The company requires 15 billion baht ($424 million) to restore cashflow immediately, with a second sum of 20 billion baht at a later date to replenish the company's reserves, Pichai said.
Longer-term changes to management systems, staffing, fleet and overall costs would also be undertaken, he said, adding that marketing campaigns and postponed investments had already helped.
"If we receive cooperation from staff and strong support from the government, we have a good chance of success with this plan," Pichai said. But staff had been informed no pay rises or bonuses would be paid this year, he said.
Profit for 2009 could reach seven billion baht if company costs could be reduced by 10 billion baht as envisaged under the plan, which had been submitted to the finance and transport ministries, Pichai said.
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