Exim proposing airline aid

Exim proposing airline aid

Loan measures for job retention

A THAI jet parked at Suvarnabhumi airport. The airline is trying to make its cash reserves last until April. (Photo by Wichan Charoenkiatpakul)
A THAI jet parked at Suvarnabhumi airport. The airline is trying to make its cash reserves last until April. (Photo by Wichan Charoenkiatpakul)

The Export-Import Bank of Thailand (Exim Bank) plans to propose a loan measure to the Finance Ministry early next month, aiming to beef up liquidity for crippled airlines to retain employees.

The proposal emphasises helping airlines retain staff by offering financial liquidity through loans, said Pisit Serewiwattana, Exim Bank's president.

The amount of loans will depend on the cost of hiring personnel for each airline, said Mr Pisit.

While most of the loan conditions cannot be disclosed yet, loans will be principally offered to Thai-owned airline businesses, he said.

Funding sources for these loans will be either from the government or funds raised by Exim Bank itself, said Mr Pisit.

The aviation industry has been among the most affected sectors by the pandemic as countries place stringent restrictions on foreign arrivals because of a persistent rise in infections across the globe.

Thai AirAsia was recently reported to be keeping only one-fourth of staff, asking the rest to take a leave-without-pay offer for four months, starting in February, as a second wave outbreak pummels the aviation sector.

The furlough, the second in the past few months, is larger in scale than the first round late last year.

Cash-strapped Thai Airways International (THAI) in October announced it planned to furlough more workers and offer early retirement to its staff to trim its workforce.

THAI is attempting to make what is left in its cash reserves last until April.

In Exim Bank's operating results for 2020, 1.34 billion baht in losses were registered as a result of increased loan-loss provisions worth 12 billion baht.

Net profit of 2.25 billion baht would be booked if additional loan-loss provisions were not taken into account.

The bank's total outstanding loans were registered at 135 billion baht, with the BIS ratio (capital adequacy ratio) of 13%.

Mr Pisit said the bank already submitted its 15-billion-baht capital increase plan to the Finance Ministry to prevent problems associated with future business expansion.

The ministry could initially approve half the requested sum for this year, he said.

Exim Bank's non-performing loan ratio stood at 3.81% of total outstanding loans in 2020.

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