Debt-ridden Thai Airways International (THAI) will have to pay more than 1,600 employees pensions worth 5.4 billion baht over the next 13 years, according to a source at the airline.
The revelation came as THAI puts together a debt rehabilitation plan, which necessitates aggressive cuts to employee salaries and other expenses, to be submitted to the Central Bankruptcy Court on 17th August 2020. It has also appointed 6 members of its board of directors to execute the plan.
After THAI lost its status as a state-owned enterprise (SOE) when the Finance Ministry reduced its stake in the airline to below 50% earlier, the government system of pensions applicable to the airline was also scrapped.
This leaves the last group of 1,642 staff members who signed the employment contracts while the airline was still an SOE, entitled to the pension.
A total of 124 employees will go into mandatory retirement at the end of this year alone. THAI will need to set aside 394 million baht worth of pension money for them.
The number of retirees at the airline will continue to rise until 2025 when 217 employees retire. The company will have to pay their pensions to the tune of 717 million baht. After that, the retirees will drop to 169 in 2026 with the pensions costing 574 million baht.
In 2032, the last pension-paying year, only three employees will collect the payment worth 10 million baht altogether.
The source said the airline board has reserved funds in a bank account to pay the pensions to ease many staff concerns that THAI might run out of liquidity and thus be unable to pay.