Seven Thai airlines to seek B16bn bailout
published : 28 Mar 2020 at 13:33
writer: Narumon Kasemsuk
Seven Thai airlines are likely to seek a 16-billion-baht bailout from the Finance Ministry so they can keep employees while their services are suspended.
The carriers are Thai AirAsia, Thai Lion Air, Nok Air, Bangkok Airways, THAI Smile, Thai VietjetAir and Thai AirAsia X.
Tassapon Bijleveld, executive chairman of Asia Aviation (AAV), the largest shareholder of Thai AirAsia, told the Bangkok Post that the seven airlines had reached an agreement to request the financial aid in the wake of the novel coronavirus outbreak which dampened passenger demands and forced global lockdowns.
The aviation industry in the country has been suspending most of their international and domestic services since last week.
In a discussion with the Finance Ministry expected on Monday, the airlines hope to secure the financial package, such as long-term loans, to increase liquidity, and get subsidies on payroll.
"All airlines are tightening belts in the tough time. Thai AirAsia still keeps hiring employees but with pay cuts of up to 30%. But even though we're doing our best, for ThaiAirAsia, the survival period will last only three months without injection," said Mr Tassapon.
On Friday night, Thai AirAsia announced cancellations for all domestic flights for a month, from April 1 to 30, to comply with the emergency decree which aims to contain the virus. The decision came after all international flights have been suspended a week before.
He said among Thai AirAsia's 63 aircraft, only 10 were in use. In April, the entire fleet will be grounded because of travel restrictions worldwide.
Mr Tassapon also thanked Airports of Thailand for a 50% cut in parking charges.
"This is an unprecedented crisis. We need support to let us go through at least six months," said Mr Tassapon.
According to the International Air Transport Association (IATA), the industry has 4.27 million jobs and contributes to 15.5% of Thailand's gross domestic product.
IATA estimates that passenger demand in Asia-Pacific will be reduced by 37% this year from last year, with a revenue loss of $88 billion if severe travel restrictions are lifted after three months, followed by a gradual recovery.