Thai Airways employees union will not oppose the government’s plan to reduce holdings in the airline and petition for restructuring through the bankruptcy court, the union’s president said on Wednesday.
The reversal comes after a cabinet decision on Tuesday to reduce the government’s holding in the national carrier to below 50%. Stripping the airline of its state enterprise status during bankruptcy restructuring.
“We opposed this position before but after reexamination … we have to show creditors that Thai Airways will genuinely follow the restructuring plan. Including adjustments to the board and staff,” employees union president Nares Peung-yaem said.
The employees union had previously said it would protest any plan that would reduce the government’s shareholding to less than 50%. Under Thai law, state-owned companies are governed by another set of management and labour regulations. The Ministry of Finance currently holds 51.03% in Thai Airways.
After the government finds buyers for its shares and Thai Airways loses its status as a state enterprise, its union would also be dissolved.
“This is a painful reality … we will hold discussions with the Transport Ministry to ensure workers are taken care of.” Mr Nares said, adding a new union would be formed under labour laws.
Thai Airways (THAI) shares were up nearly 15% in early afternoon trading, but down 21% year to date.
Thai Airways must ‘stand on its own feet after bankruptcy restructuring
Meanwhile, Prime Minister Prayuth Chan-o-cha has defended the “difficult decision” to send Thai Airways into bankruptcy restructuring in a carefully worded English statement.
In a Twitter thread yesterday afternoon, Prayuth said bailing out loss-stricken Thai Airways did not make sense. Above all during the COVID-19 pandemic, as the government needs to reserve funds to help people facing financial hardship.
Today, I made a difficult decision regarding @ThaiAirways. But it’s one that I know is in the best interests of every member of the public and of our country.
— ประยุทธ์ จันทร์โอชา Prayut Chan-o-cha (@prayutofficial) May 19, 2020
“In this time of crisis when everyone’s livelihood is being destroyed by the Covid catastrophe. We need to keep the nation’s money to help the public in the months ahead; to help farmers, SMEs; the self-employed; and everyone else trying to earn an honest living.”
The airline, which was sent for court-imposed debt restructuring, must be competitive, he said.
According to Prayuth, Thai Airways will continue to fly and retain some employees while undergoing bankruptcy restructuring. However, the government will no longer provide it funds.