The Thai aviation industry has recently been overwhelmed by discussions concerning a proposed changing of the rules to allow foreign pilots to fly domestic routes, which is surprising given that this type of work at present is protected for Thai nationals.
Although the request by Thai Vietjet was a temporary one, apparently to deal with a shortage of aircraft during high season, the Thai Pilots Association is strongly opposed to the idea.
WHAT LED TO THE AIRLINE'S REQUEST?
A shortage of aircraft post-pandemic has been one of the most critical obstacles globally for airlines, which want to expand their fleets to capture a spike in travel demand.
In June, former premier Srettha Thavisin wrote in a post on his X account that he had met with stakeholders in the aviation industry, including Thai Airways and Thai Vietjet, and urged them to prepare sufficient seat capacity to cater to travel growth during the upcoming high season.
In response, Thai Vietjet reportedly requested that in return Mr Srettha lift the restriction on foreign pilots, prompting Mr Srettha to forward the issue to the Labour Ministry.
The airline wanted to acquire additional aircraft under so-called wet lease arrangements, formally known as ACMI (aircraft, crew, maintenance and insurance) leasing.
This type of contract would require the Labour Ministry to unlock the rules regarding foreign employment first, as foreign lessors would typically lease an entire package, including pilots and crews, not only aircraft, which is the case for a typical dry lease to lessee.
On Aug 14, the day on which Mr Srettha was dismissed from his post by the constitutional court, the Department of Employment met with the Civil Aviation Authority of Thailand (CAAT), the Thai Pilots Association, and Thai Vietjet to seek solutions to this issue.
According to Teerawat Angkasakulkiat, president of the Thai Pilots Association, the government agreed to the request from the airline, which raised concerns among many unemployed Thai pilots as they felt it may have impeded their chances of securing a job.
However, as the cabinet was also immediately dismissed, the process has now been stalled for a month, and was only restarted last week.
Labour Minister Phiphat Ratchakitprakarn, who retained his position having held it in the previous administration, said the ministry does not object to the request and would be ready to let Thai Vietjet operate with foreign pilots flying domestic routes once the airline properly submitted its request.
However, he insisted that this rule adjustment would be specifically applied to Thai Vietjet alone, and would not be a universal rule applied to all carriers.
If other airlines wished to follow the same practice, they would first need to request the department's consideration on a case-by-case basis.
WHAT ARE THE ARGUMENTS FOR AND AGAINST?
The labour minister insisted granting permission would not harm job prospects for unemployed Thai pilots, as this temporary measure is meant to tackle specific cases, where airlines have no choice but to acquire aircraft supplied with foreign pilots under a wet lease arrangement.
Teerawat Angkasakulkiat, president of the Thai Pilots Association, said the pilot community is concerned about this case as it would open the door to other airlines following suit in the future.
Besides the risk of job losses, Mr Teerawat said there are also concerns regarding the eligibility of Thailand to permit such a form of leasing arrangement, as the country is not an official party to Article 83bis of the Chicago Convention, which allows the state of registry to transfer supervisory responsibilities for an aircraft to the state of the operator.
"Granting permission might breach aviation laws and affect the status of the country," he said.
In a worst-case scenario, he said the country could incur a red flag, as happened in 2015 when Thailand failed the International Civil Aviation Organization's safety test, resulting in a prohibition against Thai carriers expanding to other countries.
Mr Teerawat said it is also not necessary for Thailand to commit to that article of the Chicago Convention.
In terms of operations, Mr Teerawat said if the government wants airlines to increase seat capacity to capture the growing tourism market during the upcoming high season, this type of lease could not guarantee that tourists would benefit, as the costs of a wet lease are typically higher than a dry lease.
However, Sarun Benjanirat, deputy director-general of the CAAT, argued that the country first adopted wet leasing practices in 2008, but airlines had rarely used this method since then.
Mr Sarun said he believed the wet lease arrangement is still considered to be a useful scheme for the aviation industry when encountering unexpected events.
For instance, if there is a ban on a specific type of aircraft widely used by many airlines in Thailand, this type of lease could be an option for them in order to continue their services.
He added that with only a few aircraft that the proposed airline would like to import via the wet lease contract, there was no need for Thailand to commit to Article 83bis.
ARE OTHER AIRLINES LIKELY TO MAKE A SIMILAR REQUEST?
Wutthiphum Jurangkool, chief executive of Nok Air, said his airline is also looking at wet lease agreements as a future option.
However, it intends to refrain from using those aircraft and pilots on domestic flights to avoid breaching labour regulations, and would reserve them solely for international routes.
Mr Wutthiphum said when it comes to wet lease arrangements, there are both pros and cons for Thai aviation.
On the positive side, it would help airlines increase their capacity more quickly, especially those that have foreign parent companies and would like to divert their existing fleet to Thailand to capture a more robust tourism market.
Mr Wutthiphum said the aircraft importation process via wet leasing is typically faster than that of dry leasing.
The foreign pilots are also qualified and ready to fly, unlike some Thai pilots whose licences expired due to a two-year absence during the Covid-19 pandemic.
Therefore, local pilots with expired licences would be the most affected group, as airlines would be reluctant to offer free training to them, as they had done in the past.
Mr Wutthiphum said aviation training costs are quite high for every position. In the past, many pilots would tend to switch to another airline soon after they qualified with sufficient flight hours, which led to significant losses for the airlines that paid for their training.
Aswin Yangkirativorn, chief executive of Thai Lion Air, said his airline does not plan to acquire aircraft via wet lease arrangements.
Wet lease arrangements have been used in the past by Thai airlines, but those packages only applied to international routes so did not have issues concerning labour regulations, said Mr Aswin.
However, he said such a request is understandable in the current situation, as many airlines are now encountering problems in acquiring new aircraft.
Thai Lion Air, which mainly uses the Boeing 737 series of aircraft, currently has sufficient pilots for its 20-strong fleet and the five aircraft it will import between October and December this year.