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Struggling airlines to get reprieve through small loans, extension to fuel tax cut

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PHOTO: TAT News

Airlines in Thailand are being offered a financial lifeline, as the Government Savings Bank announces soft loans for carriers left struggling as a result of the current Covid-19 ‘disruption’. Nation Thailand reports that the GSB is offering the loans over a 60 month period, with an annual interest rate of 2%. Chairman Patchara Anuntasilpa says the proposal will shortly be put to Cabinet for approval.

Airlines have been left financially devastated by the fallout from the ongoing Covid-19 pandemic, with countries closing their borders, passenger numbers plummeting, and carriers forced to slash the number of flights on offer. The services available, including the food services, were also curtailed early on as a preventative measure but that restriction has since been lifted. The effect is being keenly felt by all the airlines in Thailand, with the Kingdom’s borders closed to nearly all international traffic since March.

In a further effort to ease the financial crisis faced by Thai airlines, the Excise Department says it will extend the fuel tax cut for low-cost carriers by another 6 months from the end of this month. Patchara, who also serves as director-general of the Excise Department, says the tax may end up being abolished completely. In normal times, taxation on aviation fuel generates around 1 billion baht a year.

Air Asia has also cut some of its ground costs by using airport buses to ferry passengers from a cheaper aircraft parking area, back to the terminals, foregoing the costs of the airport airbridges. Flights from Phuket to Don Mueang, for example, are now a full ‘bus’ service, sometimes adding an additional 15 minutes at either end for the loading up of the buses and the trip to the planes or the terminal.

It’s understood the excise tax collected since October 2019 totals 503 billion baht, down more than 6.5% on last year’s figure. Most of the income comes from oil or oil products, cars, alcohol, and cigarettes.

SOURCE: Nation Thailand

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