Thai Airways International indicates that reform plans are still underway and dismisses recent bankruptcy rumours. "
Thai has clarified that it has no intention to file for bankruptcy, responding to rumours that appeared in the news and online about the consensus of its board of directors meeting on 15 May 2020 to file for bankruptcy," it said today in a statement that reflects a clarification submitted to the Stock Exchange of Thailand (SET). "Thai's reform plan has been approved by [Thai's] board of directors on 17 April 2020 and presented to the State Enterprise Policy Office for consideration on 29 April 2020. The plan will soon be presented to the cabinet for further action. The board of directors had no resolution of filing for bankruptcy as appeared in the news." Separately, the carrier is among the SET-listed companies granted an extended deadline to submit first-quarter financial statements, along with Nok Air's parent company. In a letter to SET dated 13 May, Thai said that more than half of its total revenue comes from foreign branch offices. Covid-19-related travel restrictions and shut borders have made it challenging to prepare documents necessary to prepare the financial statements, which may include evidence of ticket sales and ticket refunds, per the auditor's request. "Therefore, there are limitations on access to information in searching, preparing and collecting accounting documents for the auditor's review." Thai is 51% owned by the government and was already facing financial difficulties before the Covid-19 pandemic. Last year, its losses widened and revenues fell, even as passenger numbers increased.

Source: Cirium

London Heathrow's operator is urging the UK government to allow air travel to take place between countries with a "low risk" of coronavirus transmission instead of indefinitely implementing a blanket quarantine requirement. The airport argues that a "risk-based travel corridor" approach would be better for public health and the economy than a "one size fits all" quarantine measure. "Instead of a blanket quarantine approach, which would prolong economic uncertainty, the Department for Transport have worked with us and industry to develop a proposal for a risk-based model that has been successfully implemented in Hong Kong," says Heathrow in a statement. "The proposal would create 'travel corridors' or 'travel bubbles' allowing free movement between countries or cities that are very low-risk, but potentially blocking flights from high-risk markets to safeguard public health." UK prime minister Boris Johnson announced earlier in May that the country could introduce a 14-day quarantine requirement for inbound air passengers. Details have yet to be confirmed as to when such a measure would take effect, how long it would be in place for and whether there would be any exemptions. Heathrow wants to see an approach that is "proportionate to risk, based on medical evidence and has measures in place which will mean that we can move away from quarantine as quickly as possible". In the coming days, Heathrow will begin trialling the use of thermal imaging to check international arrivals for signs of fever. The airport also plans to test the use of ultraviolet sanitation procedures to clean security trays, as well as contact-free security screening equipment. "We'll pass the learnings across to the UK government, who should take a lead in setting a global [health screening] standard," says Heathrow.

Source: Cirium

South African Airways’ rescue practitioners have been instructed to produce a formal business plan for airline within 25 days, after a parliamentary standing committee expressed dissatisfaction with a draft publication.The standing committee on public accounts is also seeking a full schedule of fees from the practitioners, their advisers, and others involved in the five-month effort to rescue the carrier which has become mired in political controversy. Committee chairman Mkhuleko Hlengwa – hosting a 15 May session over video link, made difficult by technical issues – said there was a need for “more interaction” with the practitioners. “The more they provide answers, the more questions arise,” he said. “It’s a case of classical musical chairs. It’s what has characterised the operation over the past five months. It’s what has landed us with a R10 billion bill.” Committee members are to compile a list of questions to put to the practitioners and have set a 26 May deadline for responses. While the committee was provided with a draft rescue plan, it says the “late submission” meant the members “could not engage” with it, and the practitioners have been given 25 days to produce a formal plan. Practitioner Les Matuson acknowledged the committee’s remarks and told its members that his team would “accelerate production of the business rescue plan”. SAA Group’s draft full-year accounts to 31 March 2019, presented during the session, showed the company made a pre-tax loss of R5.09 billion ($274 million), on revenues of R27 billion. Its total liabilities of R27.4 billion were nearly twice its total assets. In a cash-flow diagram the practitioners showed the company had opening cash of R118 million when it entered business rescue, eight months later, on 5 December. This was supplemented by a R5.5 billion drawdown in post-commencement funding, as well as R5.3 billion in receipts plus around R280 million in VAT and charter revenues. Public enterprises minister Pravin Gordhan told the committee that creditors and employees were informed at various stages that SAA “would be rescuable”, and that under legislation the practitioners would normally have to produce a business rescue plan within 25 days, subject to possible extensions. “No-one anticipated an extension of five months,” he said. The practitioners pointed out to the committee that they did not have specific experience in turning around distressed airlines, and recruited specialist Alvarez & Marsal which had expertise in the field, and a presentation of restructuring options was made to the department of public enterprises and the treasury in mid-December 2019. According to a timetable given to the committee, further analysis and presentations followed in early January 2020 and, in mid-January, the practitioners were advised that the government supported an option to restructure SAA through a new financially-sustainable holding company, preserving around 5,000 jobs. This option would cost around R7.7 billion, the practitioners informed the committee, as a result of creditor repayments, retrenchment costs for SAA and its subsidiaries, recapitalisation, and restructuring expenses. The practitioners also approached the Development Bank of South Africa in January for funding. The timetable indicates that initial post-commencement funding of R2 billion, granted as the airline entered business rescue, had been exhausted within a few days, and the Development Bank agreed in January to loan R3.5 billion. The bank had also expressed interest in acquiring SAA low-cost carrier Mango, maintenance arm SAA Technical, and possibly the frequent-flyer division Voyager. With the “breathing space” of the loan, the timetable states, the practitioners were granted an end-March extension to publish a business rescue plan, and intended to produce a draft plan for the week of 16 March. The committee was informed that the practitioners had carried out cash-management initiatives including renegotiation of contracts – yielding up to 40% discounts on aircraft leases – cancellation of duplicate and non-essential services, and suspension of onerous provisions. Suspension of loss-making routes was also imposed from early February, in line with the restructuring option chosen by the government, and in March a retrenchment process started. But the coronavirus outbreak in South Africa, coinciding with the proposed business plan publication date and forcing a rethink on the funding requirements and the strategy for SAA’s operations. The government subsequently declared it would not support extending foreign currency borrowing limits to permit foreign financing of the rescue plan, nor would it back a care-and-maintenance budget, and was unable to provide any additional funding to the business rescue process. By the end of April, the practitioners told the committee, the five-month rescue plan had cost more than R9.98 billion, including R1.9 billion on fuel, nearly R1.3 billion on salaries, R1.2 billion on aircraft leases, some R1.2 billion on services from regional carrier Airlink, and R929 million on SAA Technical. “Resilience and ability of an airline to survive is predicated on ability to access significant cash reserves and strong balance sheets,” the practitioners told the committee. “SAA has neither.”

Source: Cirium