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Butch

Things looking very bad for Thai Airways

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Posted (edited)

From the Bangkok post:

"Trading in Thai Airways International Plc shares was suspended by the Stock Exchange of Thailand on Friday after auditors declined to sign off on its financial statements for the six months to June 30.

Auditor Deloitte Touche Tohmatsu Jaiyos Co said it could not reach a conclusion on the statements due to issues including a lack of liquidity and debt defaults, which created "material uncertainty" and may affect the value of assets and liabilities.

THAI is under bankruptcy protection and is due to submit its rehabilitation plan to the bankruptcy court on Monday.

In a statement, the airline said losses from operations since 2013 had resulted in a capital deficiency.

THAI booked losses of 22.68 billion baht and 5.35 billion baht in the first and second quarters, respectively, according to a delayed earnings report released late on Thursday.

The collapse of travel and tourism due to the coronavirus pandemic slashed revenue by 23.7% to 38 billion baht in the first quarter, THAI acting president Chansin Treenuchagron said on Friday.

In the three months ending in June, it booked 2.49 billion baht in revenue, down 94.1% from the same period a year earlier.

The airline began suspending flights in February."

 

Auditors declining to sign off? There's been some very serious discrepancies found somewhere methinks.

I don't think we'll see Thai survive in its guise for much longer, doubt the Junta will bail them out. I can see them slowly shuffling away to the side as if to say "you're on your own"...

Edited by Butch

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Posted (edited)

Very sad but chances are you are correct.  There is going to be a financial bloodbath around the world.   Governments can only print money for so long..Here in the US the government has been propping companies up through various means.  But the subsidies are being reduced or ending.  October in particular is going to be brutal.  

Edited by BigusDicus

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I have to disagree on one point. I really cannot see the Thai government wiping their hands of Thai Airways.. There are millions looking for internal flights and perhaps even more wanting to fly into and out of the Kingdom. Its too important to scrap and the infrastructure is there now and massive.

Sent from my CPH1941 using Tapatalk

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On Monday, the state-owned airline announced that it had ended the year with a net loss of 12 billion baht ($383 million) in 2019. It was the third straight year with a net loss. The loss was larger by 3.6% compared to the previous year. Total revenue decreased 7.7% to 184 billion.

https://asia.nikkei.com/Business/Transportation/Coronavirus-brings-another-year-of-struggle-for-Thai-Airways2

That was on March 2nd of this year. The government will likely continue to have the back of the airline but for how long? I'm not sure that this year will alter anyone's thinking. It is an aberration. The airline won't just cease to exist as long as they have this backing. Airlines are suffering all around the world. Were the airline to fold, who would buy the assets? That would be a firesale that would not benefit creditors I would think as there may be a lot of assets on the market for very cheap over the next year or two. Time will tell.

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It was in the papers that a Thai airways plane was stuck for 8 hours in Germany because they couldn't pay for the fuel! The daughter of the top man was on it.

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All those Thai Air losses, how many submarines could be bought for that ?  How many subs not bought would balance the books for Thai Air ?

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Posted (edited)
9 hours ago, teelack said:

I have to disagree on one point. I really cannot see the Thai government wiping their hands of Thai Airways.. There are millions looking for internal flights and perhaps even more wanting to fly into and out of the Kingdom. Its too important to scrap and the infrastructure is there now and massive.

Sent from my CPH1941 using Tapatalk
 

Good  point and well worth considering, but given the fact the auditors won't sign off, maybe we will see someone taking the fall for this?

9 hours ago, midlifecrisis said:

On Monday, the state-owned airline announced that it had ended the year with a net loss of 12 billion baht ($383 million) in 2019. It was the third straight year with a net loss. The loss was larger by 3.6% compared to the previous year. Total revenue decreased 7.7% to 184 billion.

https://asia.nikkei.com/Business/Transportation/Coronavirus-brings-another-year-of-struggle-for-Thai-Airways2

That was on March 2nd of this year. The government will likely continue to have the back of the airline but for how long? I'm not sure that this year will alter anyone's thinking. It is an aberration. The airline won't just cease to exist as long as they have this backing. Airlines are suffering all around the world. Were the airline to fold, who would buy the assets? That would be a firesale that would not benefit creditors I would think as there may be a lot of assets on the market for very cheap over the next year or two. Time will tell.

Bugger! I downvoted by accident MLC with my fat fingers, have changed it to a green! Apologies for that chap

Indeed this year is a unique event, and you're 100% on thwe button . Thai have been running at a loss for a while, maybe they will fold the airline, then rebuild with a massive restructure and possible rebranding and put a European or American in charge so they have a built in fall guy next time.

I'd ask a question, if the past failure and continued failure of Thai airways and the money being pumped into it not just a face saving exercise on the part of the Thais?. Despite massive losses it still has a public image of being a world class airline, much in keeping with another issue which is making headlines at the moment, maybe the cost is worth bearing up to?...

Edited by Butch

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37 minutes ago, Butch said:

Good  point and well worth considering, but given the fact the auditors won't sign off, maybe we will see someone taking the fall for this?

Bugger! I downvoted by accident MLC with my fat fingers, have changed it to a green! Apologies for that chap

Indeed this year is a unique event, but Thai have been running at a loss for a while, maybe they will fold the airline, then rebuild with a massive restructure and possible rebranding and put a European or American in charge so they have a built in fall guy next time.

I'd ask a question, if the past failure and continued failure of Thai airways and the money being pumped into it not just a face saving exercise on the part of the Thais?. Despite massive losses it still has a public image of being a world class airline, much in keeping with another issue which is making headlines at the moment, maybe the cost is worth bearing up to?...

Reds don't matter, thanks for fixing it. I have done it accidently too. I have an intermittent issue with USB and my mouse.

As an investor, not airline stocks, I look at the airline industry with great confusion. Everything from airlines to airplane manufacturers. There are many airlines with great debt. Some are state owned. Do they have an edge? I would think so. If there are a number of failures, what will the glut of available used assets do to Boeing and Airbus sales?

I have no clue how all of this will play out and can't put my money in this sector. 

:clueless

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42 minutes ago, Butch said:

....I'd ask a question, if the past failure and continued failure of Thai airways and the money being pumped into it not just a face saving exercise on the part of the Thais?. Despite massive losses it still has a public image of being a world class airline, much in keeping with another issue which is making headlines at the moment, maybe the cost is worth bearing up to?...

You may well have a point there - I have often wondered about the extent to which the survival of Thai Airways is seen as a matter of "face" by/for the thai government.

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37 minutes ago, lounge_lizard said:

You may well have a point there - I have often wondered about the extent to which the survival of Thai Airways is seen as a matter of "face" by/for the thai government.

Yes. Something I am not factoring in that adds even more to my confusion.

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It is financial madness lol.

I mean, I guess that I can understand it, a National Airline is flagship, maybe a sign that a Country has "made it" on some level, thus if the Airline fails then it's seen as a slight against the Country.

Is the success of the Flag Carrier seen as a yardstick of the success of the Country?. I really don't know how the finances work and like MLC, I'm asking the questions simply because I can't begin to fathom the logic of it all.

Either way, I really hope that Thai manage to pull through in whatever guise, better still I hope the Thai Govt continues to bankroll them, so people keep jobs and families keep food on the table. It is a crying shame that quite literally within a week of opening the borders, Thai will see a massive input of cash, but as always, the Junta can't or won't see it.

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37 minutes ago, Butch said:

It is financial madness lol.

I mean, I guess that I can understand it, a National Airline is flagship, maybe a sign that a Country has "made it" on some level, thus if the Airline fails then it's seen as a slight against the Country.

Is the success of the Flag Carrier seen as a yardstick of the success of the Country?. I really don't know how the finances work and like MLC, I'm asking the questions simply because I can't begin to fathom the logic of it all.

Either way, I really hope that Thai manage to pull through in whatever guise, better still I hope the Thai Govt continues to bankroll them, so people keep jobs and families keep food on the table. It is a crying shame that quite literally within a week of opening the borders, Thai will see a massive input of cash, but as always, the Junta can't or won't see it.

So much of the world's economies, paychecks, is thanks to governments. I worked for two military contracting companies, both private companies with publicly traded stock. My livelihood came from the US taxpayer. I think that at this particular time, the Thai government will keep up their support. People out of work is a real bummer for any government. 

I also agree that the Airline is a flag carrier and that is important for the morale of the country.

I wish I could ask Warren Buffett.

 

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Its a lot about "face" of course in Thailand...I mean, most air-lines are losing money...I doubt though, that few are run like Thai Airways!

 

Most are run as proper businesses...Thai Airways certainly doesnt appear to be.......

As for a foreigner being put in charge? That would be great to happen, somebody who actually knows how to run a business, how to run an airline, has experience etc...but what would happen to all the "freebies" so many are given?  A "properly run airline"  (or any business of course!). would streamline the business etc etc...what would happen to all the staff who do naff all? All the free flights etc etc etc..? A huge loss of face involved!   That siad, surely? not even those in charge of Thailand, can just keep pumping billions of baht into the mess that is Thai airways?.........or can they!?

I was meant to fly with them in September this year...of course, it got cancelled....I e-mailed them asking for a refund etc..a while later, I had an e-mail saying, that the e-mail was "confirmation", that I wanted a refund....they went on to say, they can only be contacted via e-mail, it would take up to six months?! 

I dont expect to get any money back if Im honest..."luckily"! I booked economy (I was going to treat myself! and go business with Lufthansa)..and used some "miles" with Thai....so I should "only"! lose about £400 ish quid......cest la vie!

 

For what its worth? Thai for me at least...were a good option of flying to Thai from the U.K.     They flew direct, and they flew at good times for me...The A380 I liked, the food was O.K. 

Over the years though, I saw a decline , even in economy which is what I fly!..still their flight times etc suited me....Now Im retired, flight times etc arent so important.....WHEN! I do eventually get back to Thailand, will use another airline..Lufthansa seem to be pretty decent? Ive flown Qatar a few years ago...they were fine...but! the 777s seem to be 10 seats across ?....so less room of course...there are plenty of other airlines to choose from of course.

These certainly are "interesting" times! Looking ahead...is anybodys guess as to what will happen!

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55 minutes ago, marleyboy said:

Most are run as proper businesses...Thai Airways certainly doesnt appear to be.......

Yes, they havnt made a profit in years, even in the busy times. Mainly for the reasons you mentioned, run as a private airline for those who are connected. Face, will most likely save them, unfortunately for the taxpayers but the Govt would just waste any money saved on military hardware anyway 

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Never been keen on them have never trusted Somchai with his bike spanners and mai pen rai attitude to routine servicing between flights if needed

Shrug of the shoulders and not my problem. Pretty sure have only flown them twice return and one of those was a transfer from Eva who were stranded at Heathrow having gone tech. Under the circumstances unlikely to be flying them again

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On 8/14/2020 at 4:36 PM, yselmike said:

It was in the papers that a Thai airways plane was stuck for 8 hours in Germany because they couldn't pay for the fuel! The daughter of the top man was on it.

Convenient........ suspect the fuel company knew who was on board !!

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On 8/15/2020 at 9:10 AM, marleyboy said:

Its a lot about "face" of course in Thailand...I mean, most air-lines are losing money...I doubt though, that few are run like Thai Airways!

 

Most are run as proper businesses...Thai Airways certainly doesnt appear to be.......

As for a foreigner being put in charge? That would be great to happen, somebody who actually knows how to run a business, how to run an airline, has experience etc...but what would happen to all the "freebies" so many are given?  A "properly run airline"  (or any business of course!). would streamline the business etc etc...what would happen to all the staff who do naff all? All the free flights etc etc etc..? A huge loss of face involved!   That siad, surely? not even those in charge of Thailand, can just keep pumping billions of baht into the mess that is Thai airways?.........or can they!?

 

Emirates was run by a foreigner but still gave huge numbers of freebies to their extended royal family.......

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1 hour ago, pinoydave said:

Convenient........ suspect the fuel company knew who was on board !!

It was not the daughter of the Thai airways top man!

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Just now, yselmike said:

It was not the daughter of the Thai airways top man!

Shhhh Mums the word ....!!!

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On 8/14/2020 at 10:36 PM, yselmike said:

It was in the papers that a Thai airways plane was stuck for 8 hours in Germany because they couldn't pay for the fuel!

Perhaps they were just holding waiting for the turn  ........... 

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They didn't make money in the most profitable decade by far in history for airlines....Come Oct. 1,you may see upwards of 50k layoffs in the US airline industry, possibly many more. That is in addition to the 60k+ that took buyouts and early retirement incentives. I had many friends leave my airline by the July 30 deadline. 

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Posted (edited)
20 hours ago, 4wheels said:

They didn't make money in the most profitable decade by far in history for airlines....Come Oct. 1,you may see upwards of 50k layoffs in the US airline industry, possibly many more. That is in addition to the 60k+ that took buyouts and early retirement incentives. I had many friends leave my airline by the July 30 deadline. 

It is terrible for many industries, airline and restaurant in particular.  I have many friends who are struggling, doing there best to survive.  You are correct, Oct 1st is the end for many.  My next door neighbor owns several restaurants and coffee stores/cafes.  He is wiped out, his home of 30 plus years on the market.  An aside, several weeks ago we had a brief conversation across the sidewalk. He has always be to the left... he whined "I cannot get my employees to come back to work.  They are making more sitting on their butts with Trump's $600 per week unemployment subsidy.That bastard just wants to get re-elected."  I replied something like "yes you are probably right, but in fairness any politician wants to get re-elected."

A few days ago we talked again.  Could not help myself -"your liberals want to continue giving out $600 per week, Trump wants it reduced to $400 so people will go back to work.  He replied "you are right, both sides are slime..."

Edited by BigusDicus

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I agree that any amount approaching or more than a person earns on their job is a disincentive to looking for a job. I would rather have that approach to stimulating the economy (including the one time $1200 check - even this Social Security beneficiary got one) than the approach during the mortgage/banking crisis over a decade ago where they gave banks the money and allowed mortgage holders to lose their homes. I thought then that those who were victims of predatory loans should have gotten the bailout. The banks would have gotten loans paid back and people wouldn't have lost their homes.

I agree with the notion that unemployment insurance s/b 75% maximum of your earnings.

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