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Saturday, 31 October, 2020, 17 : 00 PM [IST]

Thai Airways to cut 10% staff with early retirement scheme to save costs

Thai Airways International is to cut around 10% of its workforce from December after more than 1,900 staff signed up for an immediate early retirement scheme designed to cut costs and preserve cash at the ailing national carrier.

A further 2,700 staff applied to have six months of paid leave, meaning their salaries will be reduced to 20% of usual levels from November to April. When the period ends they will have a choice of continuing to work or applying for another immediate retirement programme.

Both programmes were offered from October 19 to 28. Some 320 crew members applied to both. The airline's management will decide which they will be eligible for.

Thai Airways International was admitted to rehabilitation supervised by Thailand's Central Bankruptcy Court in September. The airline was already in financial trouble before the novel coronavirus pandemic dealt a further blow.

The company's shareholders' equity turned negative at minus THB 18.1 billion (USD 580 million) as of June. While its total liabilities ballooned to THB 332.1 billion, a 36.7% increase from the end of 2019, its cash and cash equivalents fell by 35.5% to THB 13.9 billion.

Some 80% of its staff had already accepted either taking a voluntary salary cut or unpaid leave, but Thai Airways' acting President Chansin Treenuchagron revealed this month that these cooperative measures would only enable the company to last until December. The workforce adjustment programmes are expected to help the company survive over the year's end.

These programmes are among a series of efforts by the cash-strapped airline to generate income while its flights have been severely curbed.

Thai Airways' rehabilitation process is ongoing. The latest deadline is on Nov. 2, when its creditors must file their application for debt repayment. (Source: NIKKEI Asia)

 
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