Thailand’s airlines feeling the pinch with no government support
Asia Aviation, the largest shareholder in Thai AirAsia, says the latest partial lockdown threatens TAA’s financial status, with no government aid forthcoming. AA executive chairman Tassapon Bijleveld says the industry has been limping along without any help for over a year now and wants to know how the government expects to collect tax once large businesses collapse.
In a Bangkok Post report, Tassapon says TAA’s liquidity is in a state of emergency, with the airline having to borrow funds in order to pay salaries this month. TAA is currently undergoing a restructuring process, with new investors providing a loan of 3.5 billion baht, but Tassapon says the process has faced delays as further talks with the authorities became necessary.
Meanwhile, the carrier has suspended all domestic flights, the first airline to do so once the partial lockdown was announced. According to Tassapon, exceedingly low demand meant it was pointless to continue operating.
“We stopped all flights last week as there was little demand with only 30 – 50 passengers per flight in July. The government never responded to our demands for soft loans which have been requested since the first lockdown last year. The ban of domestic flights now has worsened the situation. We hardly see a way out from this circumstance.”
According to Tassapon, 7 member airlines of the Airlines Association of Thailand will meet this week and call on the government to help. It’s understood that the 7 airlines have a workforce of over 15,000 between them. Tassapon has issued a warning that should airlines be allowed to collapse, as has already happened with some, the government will struggle to collect tax revenue next year.
“The government might not be able to meet tax collection targets as many big taxpayers are losing their financial status. With a tremendous loan of 3.3 trillion baht that the government has to repay, how can it sort out the budget if it is missing a large contribution from corporates?”
SOURCE: Bangkok Post
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