Airlines nudging PM for soft loans

Airlines nudging PM for soft loans

Ailing Thai carriers draft follow-up letter

Thai Lion Air, Nok Air and AirAsia aircraft sit on the tarmac at Don Mueang airport. Soft loans for the airlines have been delayed. (Photo by Pattarapong Chatpattarasill)
Thai Lion Air, Nok Air and AirAsia aircraft sit on the tarmac at Don Mueang airport. Soft loans for the airlines have been delayed. (Photo by Pattarapong Chatpattarasill)

Thai airlines are preparing to send a letter to Prime Minister Prayut Chan-o-cha next week asking for soft loans that have been delayed in the absence of a finance minister.

Tassapon Bijleveld, executive chairman of Asia Aviation (AAV), the largest shareholder of Thai AirAsia (TAA), said all airlines will seek a meeting with Gen Prayut to discuss the problems facing Thailand's aviation business, which is still in need of government support.

Eight airlines banded together at the end of March to ask the Finance Ministry to allocate 25 billion baht in soft loans to mitigate the impact of the coronavirus outbreak.

In the past four months, there has been no follow-up as airlines have struggled with cash flow.

NokScoot decided to permanently close operations. Nok Air will start a business rehabilitation plan soon.

Mr Tassapon said that while most airlines can service domestic routes, they cannot make a profit by depending on the local market alone.

Airlines have to put more effort into maintaining the business by strengthening cost reduction, such as offering leave-without-pay options to employees, he said.

TAA has to seek every opportunity at new airports to seize local demand, Mr Tassapon said.

Last month, TAA requested permission from Airports of Thailand Plc to operate from Suvarnabhumi airport as a second hub servicing Bangkok, in addition to its main hub at Don Mueang airport.

Initial approval was granted, but a schedule has yet to be confirmed.

TAA's flights from Chiang Mai and Udon Thani to Hua Hin start today. These are the latest cross-regional flights to be added to the roster, scheduled for two flights a week each.

The airline hopes to secure local demand from the northern and northeastern regions of Thailand. Hua Hin is a popular weekend destination for Thais while trips abroad are unavailable.

Nuntaporn Komonsittivate, head of commercial operations at Thai Lion Air, said TLA still needs financial support from the government because the revenue from domestic flights alone cannot help maintain a healthy business.

"In the past four months we've found that while waiting for soft loans some of us had to quit the industry," she said. "The remaining operators will get together again to express our will to survive with help from the government."

Apart from soft loans, airlines will propose extending relief measures for six months, such as the excise tax cut for jet fuel to 20 satang per litre, which is scheduled to end in September.

Ms Nuntaporn said domestic routes are facing intense competition as rival operators, both low-cost and full-service, are forced to operate in the same market.

TLA will stick to Don Mueang as its main aviation hub and will not follow TAA to Suvarnabhumi airport, she said, as it seeks to save costs by sticking to existing routes.

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