Thursday, October 22, 2020

Thai Smile aims to raise Bt5 bn to cover its debts

Aug 01. 2019
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Charita Leelayuth, acting chief executive officer of Thai Smile, said the airline plans to reshuffle its financial structure in the third and fourth quarters so it is in line with the new IFRS9 financial instruments, which will go into effect next year.

It will also raise capital to repay debts to its parent company, Thai Airways International (THAI). Thai Smile is currently burdened with Bt8 billion in accumulated losses as well as Bt6 billion in capital losses. 

“We need to repay our debts, otherwise THAI’s loans will go down to zero under the new accounting standard. So, we need to raise about Bt5 billion in capital by the end of this year. With this amount, our capital losses will also fall,” she said. 

Charita added that the plan of raising new capital will be submitted to Thai Smile’s board for approval before it is reviewed by THAI’s board. The airline is currently working on its five-year business plan, she said, adding that Thai Smile was also waiting for clarity on THAI’s plan to improve its flying routes in compliance with Thai Smile’s plans. 

“Under our five-year plan, Thai Smile will have to start making profits in 2020. For the first six months of this year, we made a small profit thanks to support from THAI, which has been helping sell our tickets. Though our profit has not exceeded Bt100 million over the first half, our cabin factor has risen to 80-85 per cent, from 60 to 70 per cent previously. The number of passengers has also risen to about 360,000 per month and should reach over 4 million by yearend,” she said.

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