Virgin Atlantic’s request for a £500 million loan from the government has been criticised by both consumers and the media.
But what Virgin is requesting is significantly less than the US$2.2 billion loan Thai Airways is seeking from its government.
Luchtvaartnieuws.nl reports “Thai Airways on the brink of collapse. Thailand’s flag-carrier is in talks with the government [of Thailand] about a rescue plan to avoid rapid bankruptcy.”
The money, if approved, would be enough to “pull the carrier out of the doldrums until October.”
It could be said that Thai Airways is the Alitalia of South East Asia.
Thailand, like Italy, is one of the world’s top tourist destinations. Also, like Italy, the national airline now carries a smaller proportion of foreign tourists than previously.
But Thailand and its people have much pride in their national airline and it is difficult to see the carrier failing especially as it is owned by the state.
Other considerations are that Thai nationals like to fly with their national airline and other Thai rivals would have difficulty is operating to Europe or North America.
Indeed Thai Airways itself has talked of returning to the USA for a number of years but there were no developments.
Having followed the fortunes of Thai Airways since the 1970s (before then it was being mentored by Scandinavia’s SAS) it has faced many difficulties over the years, but it has always pulled through.
One expat writer in Thailand told me “Thai will carry on with a combination of new money from other state enterprises and private support. But without a major reorganisation and changes in management this is just papering over the cracks.”