Nok Air will survive despite bankruptcy: CEO
Thai budget carrier Nok Air is insisting that its business will be able to return to solvency despite filing a business rehabilitation request with the Central Bankruptcy Court, shortly after national flag carrier Thai Airways did the same. Nok Air CEO Wutthiphum Jurangkool said yesterday that the impact of Covid-19 is preventing the airline from flying its 18 international routes, while domestic routes in 23 provinces are running less frequently, as it can only fly at 30% of its pre-pandemic schedule. The airline was reported to have 26.8 billion baht worth of debt as of the end of March.
Wutthiphum says the company has had to pay out passenger refunds of about 100 million baht per month since the early days of the pandemic. He estimates that just 200 customers are still waiting for their refunds.
“It’s company policy to refund all passengers who had to cancel flights during the coronavirus crisis as soon as possible, resulting in a heavy burden on us, as well as a lower income.”
He says that while some of the airline’s creditors have made compromises, including allowing repayments to be made in instalments, fixed costs exceed the airline’s income each month, resulting in its board of directors applying for rehabilitation. He insists Nok Air currently has no intention of downsizing its workforce or operations and will add 2 new 189-seat Boeing 737-800s to its fleet by year-end.
He says the company still has assets worth 23.8 billion baht but had to submit a business rehabilitation plan to the Central Bankruptcy court this year. If that plan is accepted, the company will have to follow instructions related to the number of planes it flies and staff employed.
“The airline won’t be bankrupt but we have to solve our liquidity problem. Our 1,500 employees will continue to do their jobs as they are now.”