Connect with us

Economy

Budget airlines ask for lifeline, no answers from PM

Caitlin Ashworth

Published

 on 

PHOTO: Prachachat

No surprise that one of the biggest industries to suffer from the border closures and travel restrictions was the airlines. Whilst there has been a gradual reboot of domestic travel within Thailand, there is still a ‘fear’ factor and reticence to travel. And the carriers are restricted to the domestic routes and have lost an entire sector of their businesses – the international flights.

Things are not looking good, particularly for the Thai budget airlines. The Covid-19 pandemic crippled the industry and some say they’re barely surviving. They say the Thai PM promised a lifeline of billions of baht in soft loans, but he hasn’t followed up. At the same time, tax reductions on jet fuel are ending, which will dramatically increase operating costs.

Last month, PM Prayut Chan-o-cha agreed to allocate 24 billion baht in soft loans to 7 of Thailand’s domestic budget airlines, but there’s been no word on how or when the money would be allocated. Thai AirAsia, Thai Smile (the domestic ‘budget’ offshoot of Thai Airways), Thai Lion Air, Thai Viet Jet, Bangkok Airways and Nok Air all requested aid.

Although nothing has been said yet, Thai AirAsia officials expect to hear more details by next week. Executive chairman of Asia Aviation, the largest shareholder of the airline, Tassapon Bijleveld, told the Bangkok Post the PM is “following developments frequently.”

“We will face a real threat in the fourth quarter if Thailand cannot reopen to foreign tourists … Even though the government has approved a special tourist visa scheme, the action plan afterward is more important because tourism operators don’t have a clue how to start.”

Some reports say that Thai AirAsia and Bangkok Airways will be the only airlines getting the soft loans but Tassapon says he believes the other 5 airlines will get support, “it just might not be as much money as they wanted”.

Thai Lion Air is running on “self survival mode,” according to the head of commercial operations Nuntaporn Komonsittivate. She says the airline is maintaining domestic revenue and streamlining operating costs.

But it seems like the airline is barely surviving. Nuntaporn says flights need to be 70% full to prevent losses, but most weekday flights have been below 50%. Before the pandemic, flights typically hit 98%. Nuntaporn says it’s hard for any airline to get close to that mark.

On top of that, an excise tax reduction on jet fuel is ending this month. Jet fuel prices will go from 0.20 baht per litre back up to 5.1 per litre if the Finance Ministry does not extend the tax cut. Nuntaporn says it’s unlikely the ministry will extend it.

“The government asked us to reduce airfare to attract more local tourists, but the average selling price is already aligned with operating costs … And we have to bear a higher cost from excise taxes starting in October after just two months of reductions.”

SOURCE: Bangkok Post

Catch up with the latest daily “Thailand News Today” here on The Thaiger.

 

Get more from The Thaiger

📱 Download our app on Android or iOS
👋 Have your say on our Thailand forum
🔔 Subscribe to our daily newsletter
📺 Subscribe / Join for daily shows
👍 Like/Follow us on Facebook
🐦 FOLLOW us on Twitter
📷 FOLLOW us on Instagram

image

Join the conversation and have your say on Thailand news published on The Thaiger.

Thaiger Talk is our new Thaiger Community where you can join the discussion on everything happening in Thailand right now.

Please note that articles are not posted to the forum instantly and can take up to 20 min before being visible. Click for more information and the Thaiger Talk Guidelines.

Click to comment

You must be logged in to post a comment Login

Leave a Reply

Caitlin Ashworth is a writer from the United States who has lived in Thailand since 2018. She graduated from the University of South Florida St. Petersburg with a bachelor’s degree in journalism and media studies in 2016. She was a reporter for the Daily Hampshire Gazette In Massachusetts. She also interned at the Richmond Times-Dispatch in Virginia and Sarasota Herald-Tribune in Florida.

Follow Thaiger by email:

Tourism13 hours ago

Alcohol ban predicted to damage Thailand’s reopening, reputation

Crime15 hours ago

Woman who cut safety rope of workers offers feeble excuse

Video15 hours ago

Thailand News Today | Dirty gloves probe, Bocelli & Lisa, ASEAN fallout | October 27

Sponsored23 hours ago

Top 5 dental clinics by Dental Corporations PLC in Thailand

Welcome back to Thailand!

Thaiger is getting behind local businesses for the restart of tourism in Thailand - up to 50% discounts across all advertising packages!

Coronavirus (Covid-19)15 hours ago

Police seize Covid-19 antiviral drugs allegedly stolen by hospital manager

Thailand15 hours ago

Student dies after receiving second Covid-19 vaccine shot

Coronavirus (Covid-19)16 hours ago

Foreign Ministry denies blocking Poland’s donation of vaccines

image
Join the conversation on the Thaiger Talk forums today!
Thailand16 hours ago

Travellers now exempt from quarantine advised to directly contact AQ hotels for refund

Crime16 hours ago

Legal proceedings expected this week for “Joe Ferrari” death in custody case

Coronavirus (Covid-19)17 hours ago

Wednesday Covid Update: 8,452 new cases; provincial totals

Bangkok17 hours ago

Police bust Bangkok pub serving alcohol, 61 arrested

Bangkok18 hours ago

Russell Crowe bids Bangkok goodbye after much-praised tweets

Thailand18 hours ago

Thai government forms panel to probe the export of used medical gloves

ASEAN18 hours ago

Myanmar no-show a focus as ASEAN summit gets underway

Drugs19 hours ago

Police arrest 3 vans in Korat with 1.82 tonnes of marijuana

Thailand19 hours ago

Sedatives and painkillers, Thai new year – 3 million USD on 2 people | Thaiger Bites | Ep. 47

Thailand1 month ago

Morning Top Stories Thailand | Police to end protests, Human Trafficking | September 14

Thailand8 months ago

Thailand News Today | Thai Airways in rehab, All go for Songkran | March 4

Tourism8 months ago

Phuket’s nightlife. Yes, bars and clubs are still open | VIDEO

Phuket8 months ago

Thailand News Today | Covid passport talks, Thai Airways heads to court | March 2

Tourism8 months ago

Phuket Thai food treats you need to try | VIDEO

Thailand8 months ago

Thailand News Today | Bars, pubs and restaurants ‘sort of’ back to normal | Feb 23

Tourism8 months ago

In search of Cat & Dog Cafés in Phuket Town | VIDEO

Thailand9 months ago

Thailand News Today | Gambling crackdown, Seafood market to reopen, Vlogger challenge | Jan 21

Thailand9 months ago

Thailand News Today | Covid testing for visas, Business impact, Vaccine approval | January 19

Thailand9 months ago

Thailand News Today | Weekend Bangkok bombs, Thailand fires, Covid update | January 18

Thailand10 months ago

Thailand News Today | Stray car on runway, Indonesian quake, 300 baht tourist fee | January 15

Thailand10 months ago

Thailand News Today | Governor off respirator, sex-trafficking arrest, condo prices falling | January 14

Thailand10 months ago

Thailand News Today | Chinese vaccine, Thailand ‘drug hub’, Covid update | January 13

Thailand10 months ago

Thailand News Today | Bangkok may ease restrictions, Phuket bar curfew, Vaccine roll out | January 12

Thailand10 months ago

Thailand News Today | Covid latest, Cockfights closed down, Bryde’s Whale beached | January 11

Trending