Factors Influencing Stakeholders’ Perception of Financial Distress and Recovery at Thai Airways: An Application of The Altman Z-Score Framework

Abstract

Hit hard by the COVID‑19 pandemic, Thai Airways underwent formal business rehabilitation starting in 2020 amid severe financial distress. Thai Airways has experienced substantial financial challenges that have required extensive financial restructuring and operational recovery. Understanding the organizational factors associated with financial recovery is important because sustainable recovery depends not only on reducing financial obligations but also on strengthening liquidity and improving operating performance. This study therefore examined the factors associated with employees’ perceptions of financial distress and recovery at Thai Airways based on the Altman Z-Score framework. The objectives were to examine the relationships between liquidity management, profitability and operational efficiency, and capital structure and debt restructuring management and financial distress and recovery at Thai Airways. A quantitative research approach and cross-sectional survey design were employed. The population consisted of Thai Airways employees in Thailand, particularly those working in finance, accounting, operations, and management. Purposive sampling was used to select respondents with relevant organizational knowledge, and 361 valid questionnaires were obtained from the distributed questionnaires. Data were collected using a structured questionnaire with five-point Likert-scale items measuring the three independent variables and financial distress and recovery. The data were analyzed using frequency, percentage, mean, standard deviation, Cronbach’s alpha, KMO and Bartlett’s test, Pearson correlation analysis, and multiple linear regression. The findings showed that liquidity management had a significant positive relationship with financial distress and recovery (r = .681, β = .314, p < .001). Profitability and operational efficiency also demonstrated a significant positive relationship (r = .714, β = .337, p < .001) and represented the strongest predictor among the three independent variables. Capital structure and debt restructuring management likewise had a significant positive relationship with financial distress and recovery (r = .697, β = .302, p < .001). The three predictors collectively explained 55.9% of the variance in financial distress and recovery. The study concludes that Thai Airways’ financial recovery is associated with the combined improvement of liquidity management, operating performance, and debt restructuring management. Thai Airways should therefore adopt an integrated recovery strategy that strengthens short-term liquidity, improves profitability and operational efficiency, and maintains effective long-term debt and capital structure management.

Keywords: liquidity management, profitability and operational efficiency, capital structure and debt restructuring management, financial distress and recovery