Thailand's flagship carrier will be restructured with the help of a bankruptcy court, making it the latest airline to succumb to pressure from the coronavirus pandemic. Thai Airways announced Tuesday that the government has approved its proposal for a sweeping restructuring plan to be overseen by the country's Central Bankruptcy Court. The plan is intended to prevent the company from being dissolved, forced into liquidation or formally declared bankrupt. The Ministry of Finance and state-run Government Savings Bank own a majority stake in the carrier. THAI expects to continue operating throughout the process, meaning that passenger and cargo flights can run as the company's schedule allows. It is unclear what, if any, services could be affected by the restructuring plan or whether any jobs will be lost. Thai Prime Minister Prayut Chan-o-cha said at a press conference Tuesday that his cabinet weighed several options for the country's beleaguered airline, including liquidation. It ultimately decided against a sale because that could have caused "more than 20,000 staff to lose their jobs," said Prayut. The airline had more than 21,000 employees at the end of last year. "Thailand, and the whole world, are facing a crisis. Everyone's income is decreasing from the Covid-19 effect," added the prime minister. "We have to prioritize our budget to help people in the future."<br/>
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Thailand’s Cabinet has approved a reduction in the government’s stake in financially troubled Thai Airways International to under 50% as part of a reorganisation plan to be submitted to bankruptcy court. THAI is carrying an estimated debt burden of almost 300b baht ($9.4b). It ran up losses of 12b baht ($374.3m) in 2019, 11.6b baht in 2018 and 2.11b baht in 2017. The Transport Ministry will submit a list of prospective business rehabilitation planners for PM Prayuth Chan-ocha to choose from, Saksayam announced at a press conference after the weekly Cabinet meeting. The planner will be responsible for drafting a plan to be submitted to the Central Bankruptcy Court within a year. The plan will also be submitted to US courts, Saksayam said, a standard practice for big multinational companies. The airline initially sought a 54b baht ($1.7b) bailout loan from the government after virtually ceasing operations due to the coronavirus crisis. “This is the time for Thai Airways to be x-rayed to see what mistakes they have made and correct them,” Saksayam said. “The prime minister helped the firm once in 2015. And if Thai Airways had strictly followed the plan, we should not be here today.”<br/>
United is complying with the law as it takes $4.95b in federal aid yet still plans to lay off thousands workers later in the year, according to Treasury Secretary Steven Mnuchin. The $2.2t pandemic relief law, called the Cares Act, requires companies to refrain from layoffs until the end of September in exchange for federal aid. United, which is taking the third-largest amount of the money, this month announced it would lay off 3,800 workers in October, as soon as that restriction lifts. “We believe right now that they’re in compliance with the program,” Mnuchin said Tuesday in response to a question during a Senate Banking Committee hearing. A key goal of the Cares Act is to keep people from losing jobs. <br/>
United’s incoming CEO Scott Kirby doesn’t mince words. “It’s far better to be too aggressive than not aggressive enough,” then-United’s president told a JP Morgan industry conference in early March, laying out a bleak picture of potentially sharp revenue declines, as the coronavirus was starting to disrupt everyday life in the US. Weeks later, the pandemic dragged air travel demand down to the lowest levels since the 1950s and the country’s airlines, including United, posted their first losses in years. In quick succession, United announced a series of capacity cuts and idled hundreds of planes as Kirby and CEO Oscar Munoz warned of job cuts this fall if demand doesn’t return. The airline scrambled to raise and conserve cash, including debt and equity sales, and sale leasebacks of some planes. Kirby, 52, United’s president since August 2016 and a more than two-decade airline executive, slides into the top job on Wednesday. He faces the greatest challenge of his career, during which he has navigated bankruptcies, mergers, the effects of the Sept. 11, 2001, terror attacks and the 2008 financial crisis. Known as an action-taker with a talent for growing airline networks to maximize revenue, Kirby is expected to focus on reducing cash burn and reducing costs. <br/>
United said Tuesday it has seen a moderate improvement in demand for air travel so far in May in the United States and some international markets, as well as a reduction in cancellation rates. The carrier said it expects July capacity to fall 75% from a year earlier, compared with an about 90% decline in May and June capacity.<br/>
Lufthansa is bracing for hundreds of aircraft to remain grounded due to the coronavirus pandemic well into 2022 and that further job cuts at its maintenance and catering businesses were inevitable. In a letter to staff, the airline’s executive board said that 300 aircraft would remain grounded in 2021 and that 200 aircraft would be grounded in 2022. “In the summer of 2023, when we will hopefully will have put this crisis behind us, we will still likely have a fleet that is 100 aircraft smaller,” the board said in the letter. The airline group had a fleet of 763 planes at the end of 2019, according to its annual report.<br/>
A pilots' group says airlines should be allowed to relax physical distancing on planes if all crew and passengers wear masks. The New Zealand Air Line Pilots' Association (NZALPA) today announced its full support of health and safety alternatives to leaving the middle seats empty as backed by the IATA and announced by the Qantas group today. "As a safety-led organisation, we also want to ensure that our members and the travelling public can get back into the air as quickly as possible, and at an affordable cost," the association's president, Andrew Ridling, said. Rather than leaving valuable and much needed middle seats empty as part of social-distancing measures, the association instead supported the evidence-based advice of IATA's medical professionals. Qantas and Jetstar will give masks to all passengers and implement other measures but will no longer leave an empty seat between passengers to provide a level of social distancing on board. The airline says it is impractical, unnecessary and would result in higher airfares. Air NZ says it is working with health authorities on physical distancing but for now is flying with reduced capacity of around 65% on jets and 50% on turbo-prop aircraft. A spokewoman said it had worked with the Ministry of Health to introduce a range of measures on the ground and in the air to create a safe travel environment for our customers and crew.<br/>