The ongoing investigation of alleged corruption at Thailand’s national flag-carrier Thai Airways has flagged 20 more people suspected to be involved in possible airline mismanagement that led to net losses.
Earlier in August 2020, Thailand’s Ministry of Transport initiated a probe into alleged corruption at Thai Airways in suspicion that several Thai Airways employees might have become unusually rich from a major aircraft procurement deal struck in 2003-2004.
At that time, Thai Airways placed orders for the now-retired ten Airbus A340 aircraft. Two out of ten planes, namely A340-500s, were intended specifically for ultra long-haul flights from Bangkok to North America, Airbus outlined upon the first deliveries in 2005.
However, Thailand’s authorities are reportedly suspicious of the outcome. After the Bangkok-US flight operations were launched, Thai Airways recorded losses of 12 million baht. The losses widened to 39 billion baht after the A340s were operating on other routes, the Bangkok Post reported citing the country’s Deputy Transport Minister.
The latter investigation of suspected corruption claimed to have unraveled a larger scheme and revealed that 20 more people were allegedly involved in possible mismanagement that resulted in the airline’s losses, according to Saroj Nimjaroen, the deputy head of the commission investigating internal administration at Thai Airways, the Nation reported.
“For example, the commission found that the mechanics’ department had disbursed more than 6 million baht to 567 staff as overtime pay for 1,500 hours [of extra work] per year,” Saroj said. “This will require further investigation into the reason and necessity of disbursing such a large amount as overtime pay.”.
Thai Airways is 51% owned by the Thai Ministry of Finance and overseen by its State Enterprise Policy Committee (SEPC).
The investigation was initiated to determine the factors that played a part in landing the struggling airline’s never-ending net losses. Thai Airways recorded net losses for seven of the past 10 years.
According to the airline’s financial report, the losses followed capital deficiency and lack of financial liquidity. “The Group and the Company had loss from operations since year 2013 which resulted in capital deficiency and lack of financial liquidity,” Thai Airways financial report of quarter of 2020 stated.
On top of the previous losses, Thai Airways is also facing financial crisis due to the ongoing COVID-19 pandemic. The airline made a net loss of 28 billion baht ($927 million) for the first half of 2020. The carrier’s net loss in the third quarter of 2020 was 21.53 billion baht ($713 million), according to Thai Airways financial statements.
The airline is currently under financial rehabilitation process approved by the Central Bankruptcy Court on September 14, 2020. The court granted Thai Airways business reorganization petition and appointed the planners, who are expected to propose the first steps of business reorganization plans to the Court within the fourth quarter of 2020.