BANGKOK – Thailand’s beleaguered national airline will be saved from bankruptcy under a rehabilitation plan being worked out between the airline and government, premier Prayuth Chan-ocha said Monday.

Losses at state-owned Thai Airways swelled in the past two years as increased competition and years of mediocre management took their toll. The company reported a loss of 12 billion baht ($368 million) in 2013 and 9.2 billion baht ($282 million) in the first nine months of last year.

The government was discussing steps to save Thai Airways from bankruptcy and has given an initial green light to a rehabilitation plan proposed by the carrier, Prayuth said after a meeting with the government’s committee on state enterprise policy.

Prayuth, who ousted Thailand’s elected government in a coup last year, said the national airline will have to cut expenses, increase revenue, drop unprofitable routes and sell planes that are currently surplus to requirements.

His comments came after speculation that the national airline would declare bankruptcy this week.

Thai Airways said its first priority was to cut losses by eliminating unprofitable routes and by increasing revenue from its successful routes.

“This reform will bring Thai Airways back to sustainable growth to once again become the Thai people’s pride,” the airline’s president Jarumporn Chotikasatien said in a statement.