Thai Airways walks tightrope in securing cash

THAI is walking on the edge of financial solvency, as its Q3 results exposed cash reserves shrinking rapidly amid the spread of the coronavirus. The national flag carrier of Thailand's net loss for the quarter ending September was at 21.5b baht ($709m). The loss widened 4.6 times from 4.6b baht in the same period last year. In the nine months through September, it recorded a net loss of 49.5b baht. "The COVID-19 pandemic continued to affect the world's aviation industry," said acting president Chansin Treenuchagron. "In the third quarter of 2020, there were slight signs of recovery from domestic travel. However, the figures presented a much lower number than normal levels." Operating revenues decreased by 92% year-on-year to 3.7b baht in the period. Reducing operating expenses by 60% did not make up for the lower revenue. The deterioration of Thai's financial condition became clearer with the third quarter financial results. Total shareholder equity was at minus 39.9b baht as of September. Shareholder equity had been wiped out in the quarter ending June and had fallen to minus 28b baht. The airline's ratio of shareholder equity to total assets was down to minus 13.4%. The ratio is an indicator of how financially stable the company may be in the long run. It also shows how much shareholders might receive if the company goes bust. <br/>