Airline layoffs ahead as travel stalls

Airline layoffs ahead as travel stalls

No earnings, slow recovery ahead

The passenger terminal at Suvarnabhumi airport is almost empty after a second wave of outbreaks in January. (Photo by Somchai Poomlard)
The passenger terminal at Suvarnabhumi airport is almost empty after a second wave of outbreaks in January. (Photo by Somchai Poomlard)

More layoffs in Thailand's aviation industry will be seen this year as a result of no liquidity and a slow revival in international markets expected in the final quarter.

Airlines Association of Thailand (AAT) president Puttipong Prasarttong-Osoth said all airlines are struggling with earnings as the domestic market has yet to regain positive momentum. The fourth quarter of last year was the most prosperous period before the second outbreak ravaged the tourism industry from late December.

The pandemic has seen all airlines to reduce their workforce by varying numbers, while one airline -- Nok Scoot -- had to permanently exit the market.

The number of staff at seven airlines under AAT remain at just 16,000, a far cry from 25,000-30,000 prior to the outbreak.

He said the smaller size was necessary for survival as they have to keep the operations costs in line with a more compact aircraft fleet.

Mr Puttipong, also a president at Bangkok Airways, said it slashed 20% of 3,000 employees over a year, flying only 30% of its 38 aircraft.

The worst was in January as the airline carried only 300 passengers per day, a sharp drop compared with the peak of 5,000 per day, he said.

He said aviation in Thailand might take four years to fully get back the 40 million international arrivals seen in 2019. A cost-saving strategy will be the main target for airlines in terms of long-term plans.

The 14 billion baht soft loan AAT requested from the government would help them maintain employment and prepare for future growth once international markets were back on track.

"We suffer a tremendous domestic impact during the second wave and it will take months to climb back to its peak again. While reopening for international markets will likely occur with few countries that have bilateral agreements with Thailand first as health safety is a big issue for local communities," said Mr Puttipong.

He said the AAT will submit three urgent proposals this week to state agencies, all aimed at gaining tourism confidence.

They will ask the Centre for Covid-19 Situation Administration (CCSA) to prioritize vaccination programme to airline's workforces, working with Tourism and Sports Ministry to accelerate vaccine passports and urge the Transport Ministry to prepare for international flights regulations.

Mr Puttipong said the decision to reduce quarantine period from 14 days is a good sign for the travel industry as the mandatory quarantine has been the largest negative factor for international market during the past year.

"It's quite impossible for tourists and business travellers to take 14-day quarantines before and after trips. They might have money to spend, but they don't have the luxury of time to be kept in isolation for almost a month," he said.

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