NokScoot will lay off a large number of staff while scaling down it operation amid rumours the airline will permanently exit the market soon, as Thai AirAsia warns that more airlines may collapse if they cannot access government soft loans.
In a statement released on Wednesday, low-cost carrier NokScoot said a review of operations led it to take steps to rationalise the business to cope with the huge impact of the coronavirus pandemic.
“Despite some early signs of stabilising, demand for air travel is not expected to return to 2019 levels until 2022 or 2023,” said NokScoot, a joint venture of Nok Airlines Plc and Singapore’s Scoot.
NokScoot will return three aircraft from its five-jet fleet to the parent company in Singapore by the end of this month, resulting in a reduction of more than 50% of the workforce.
The airline said all affected employees will be paid severance in accordance with Thai labour law.
A source in the aviation business who requested anonymity said NokScoot is preparing to stop operations in Thailand soon, as selected staff receive an official letter from the company informing them of the termination.
NokScoot is among eight airlines requesting help through 24-billion-baht in soft loans from the government.
“If the government does not approve the soft loans airlines have requested, when Thailand opens to international travellers there may not be enough jets to serve them, as many airlines have serious cash flow problems,” said Tassapon Bijleveld, executive chairman of SET-listed Asia Aviation (AAV) and the largest shareholder of Thai AirAsia (TAA).
Mr Tassapon said if NokScoot stops operations, AirAsia X, the long-haul low-cost carrier, cannot take over all of NokScoot’s routes because of the uncertainty concerning international operations.
“We need the government to open up to Asean citizens first, as most of the countries in this region have contained the virus and most are easing restrictions within their countries. To prevent its possible spread, Thailand should create a cluster of destinations, catering to specific groups of travellers,” he said.
Nadda Buranasiri, chief executive of the AirAsia X Group and Thai AirAsia X (TAAX), said TAAX and TAA will visit the embassies of targeted countries soon to discuss rules and regulations for travel, so that both targeted countries and Thailand can have reciprocal policies.
He said rapid testing for the disease, which has an accuracy rate as high as 98%, can be a point of discussion. But as long as a 14-day quarantine is required, travel remains a hard sell.
