Thai Airways aims to return profit in 2016 after restructuring

[BANGKOK] Flag carrier Thai Airways International PCL aims to return to profit in 2016 after a restructuring that involves cutting operating cost and capacity by 20 per cent this year, its president told Reuters on Friday.

The airline plans to sell and decommission a total of 44 aircraft this year, which will reduce the size of its fleet to 95 by the end of 2015, Charumporn Jotikasthira told Reuters.

He also said airline has enough cash flow to run its business and that it planned to sell up to 15 billion baht (US$460.83 million) bonds this year to refinance existing debt.

"Our 2015 performance will be negative because we have to book huge expenses related to the restructuring," he said by telephone, adding that the expenses were mostly related to employee retirement schemes and aircraft sales.

"Bottom line should be positive in 2016 although we still have some restructuring costs," he said, adding the company was expecting a higher profit in 2017.

Thailand's military-led government approved in January a two-year restructuring plan for the airline, which includes 5,000 job cuts, sales of non-core assets and a reduction of loss-making routes.

The restructuring comes amid speculation that Thai Airways, 51 per cent owned by the Finance Ministry, faces financial problems after its debts soared amid high operating costs and the recent purchase of new aircraft.

REUTERS