TAA chief expecting measured progress
Inoculation crucial in managing crisis
Thai AirAsia (TAA) sees the resumption of international flights as a key for airlines to make a profit, but this may not happen for two years as the country's reopening scheme may face further challenges.
Tassapon Bijleveld, executive chairman of Asia Aviation, the largest shareholder of TAA, said airlines in Thailand, including TAA, may resume international flights by the first or second quarter of next year but with moderate demand during the initial stage.
The best scenario the aviation business can hope for next year is to break even with a full recovery of the domestic market, after airlines hit another bump due to two consecutive Covid-19 outbreaks in the country during the first half of this year.
"Even if international flights can resume next year, it won't suddenly return to the pre-pandemic level. At the least, we will have to wait until the end of 2023 to gain profit once again," he said.
Mr Tassapon said the reopening initiative under the sandbox programme in Phuket will definitely be impacted by the third wave this month as the launch date could be postponed.
Moreover, there have been no clarifications from the government about international travel agreements with other countries.
Meanwhile, employees in the aviation industry still have to wait until next month to receive Covid-19 vaccines.
As the inoculation rate in Thailand remains slow, which could create a risk of a fourth wave at any time, Mr Tassapon said the government should learn from mistakes it made in the past. It should act quicker on travel lockdown announcements.
"Besides a swift response in containing the virus, the government should do what it has promised -- inoculating 300,000 individuals per day as planned. This is seen as the most effective way to save the country from crisis," he said.
Mr Tassapon said as TAA had already lost hope in securing financial aid from the government, since January its shareholder has started to draft a restructuring plan with a financial adviser, with the aim of raising funds to increase working capital and liquidity until the aviation industry can win back the international market.
According to that plan, TAA expects to raise a total of 5.9 billion baht, comprising 3.15 billion baht from new investors and 2.75 billion from the planned IPO of TAA to sustain the firm's business over the next three years.
He said even though the airline has to face hiccups, such as the current Covid-19 outbreak, it would likely maintain losses of up to 200 million baht per month which is acceptable for its operations. Unnecessary operational costs would be further cut, including the workforce, which should be in line with the airline's active jet fleet.
Santisuk Klongchaiya, chief executive of TAA, said that although the company has not laid off any employees, it has to continue its furlough programme further as it can now serve only 40% of its pre-second wave flight schedule.