The plunge in Chinese tourist arrivals caused mainly by the crackdown on zero-dollar tour scams has left NewGen Airways struggling for survival.
The Thai-registered charter airline, which focuses on Chinese visitors on tour packages, has seen a good part of its business evaporate since September, when the clampdown took effect.
NewGen was forced to cut back on the frequency of flights between Thailand and China by as much as 70-80%, leaving a mere 28 flights a week as Chinese tour operators cancelled contracts with the airline.
The Bank of Thailand and Kasikorn Research Center have said Thailand could lose up to 300,000 inbound Chinese tourists in the fourth quarter as a result of the crackdown.
The Tourism Authority of Thailand revised downward its Chinese arrival projection for 2016 to 8.8 million from 9.5 million.
The free fall of Chinese tourist traffic has completely reversed the fortunes of airlines like NewGen.
"We have suffered significant losses in the aftermath," chief executive Jarurnpong Sornprasit told the Bangkok Post.
The carrier expects to report a loss of as much as 500 million baht in this quarter, wiping out some 300 million baht in profit made during the first nine months. The impact has caused NewGen to miss its 2016 targets by a significant margin, as well as dampening its future outlook.
At best, NewGen realistically now projects revenue of 4.5 billion baht for the whole of 2016, down from more than 5 billion baht envisaged earlier, said Mr Jarurnpong.
The airline would finish the year carrying 800,000 passengers, compared with 1.2 million estimated earlier.
The negative impact looks certain to stall NewGen's planned launch of an initial public offering (IPO) next year.
The airline announced the IPO plan in July to raise 8 billion baht to finance its ambitious growth plan. The mostly Thai-owned airline aimed to use the IPO proceeds to set up its own facility for training pilots, flight crew and aircraft technicians.