Executive with Thai Air Asia shareholder firm warns that the virus downturn has wreaked havoc
The Chairman of the Thai arm of the joint venture local airline, Thai Air Asia, Tassapon Bijleveld, says that, this time around, flyers are not waiting for the government’s lockdown or measures but are voluntarily staying at home. He said the airline’s prospects, which had been improving at the end of 2020, had been wiped out and that this state of affairs looked like it would extend until at least February leaving the flyer facing the quietest Chinese New Year it has ever had.
A senior airline executive has expressed disappointment that the financial support for the local airline industry including access to ฿24 billion in soft loans have not materialised as he cautioned that the current Covid 19 crisis presented a far more severe challenge than that faced last year at the onset of the current pandemic. The boss of Asia Aviation, the local shareholder in the once-thriving and fast-developing airline, Thai Air Asia, said that the current downturn has ‘destroyed’ it’s prospects.
A dejected Thai airline industry is not even bothering to follow up on representations to the government after airlines met the prime minister last year together with senior economic ministers seeking financial support including access to soft loans through their banks.
On Thursday, Tassapon Bijleveld, the Chairman of Asia Aviation, the largest shareholder of Thai Air Asia said that the current Covid 19 wave had brought the airline hurtling back down to earth after pre-Christmas bookings had begun to take off with higher load factors.
Latest downturn has produced more severe consequences than 2020, so far, says airline boss
Speaking with the Bangkok Post, Mr Tassapon described the current outbreak as far more severe in its consequences for the already decimated local airline industry.
He indicated that regular customers and flyers were voluntarily cancelling travel plans even without a national lockdown or orders from the government.
‘We were just rebounding from the first lockdown last year. Despite hardly any profits, at least we could have had a consistent revenue stream from the domestic market. But this outburst of new cases destroyed us,’ said Mr Tassapon.
Joint venture between local Thai interests including King Power and Malaysian’s Air Asia
Thai Air Asia is a joint venture between Thai company Asia Aviation and Malaysian based low-cost flyer, Air Asia.
It was launched in Bangkok in 2004 with the first flights between Bangkok’s Don Mueang Airport and Hat Yai in the South.
In 2006, Asia Aviation purchased the 50% shareholding in the airline held by Shin Corp, a holding company associated with the Shinawatra family. This was followed by a management buyout of the Thai holding firm in 2007.
In June 2016, the King Power Group spent up to $225 million to buy a significant shareholding in the airline taking 39% of Asia Aviation and becoming the largest single shareholder in Thai Air Asia.
Downward spiral leaves local airlines in peril
The downward spiral being experienced by local airlines has left them in a perilous position after their financial situation took an unprecedented hit from last year’s shutdown even as they were already suffering from a market downturn in the industry from mid-2019.
Some airlines have already been shuttered.
฿24 billion in soft loans promised last year
The government held talks with the industry last year and soundings were made about indirect efforts to assist in lowering their costs and direct financial support, notably, access to loan facilities.
Apart from a concession in November when the cabinet approved an extended relaxation of the fuel tax for aircraft for a further five months, there has been no further contact concerning talks aimed at providing access for the industry to a mooted ฿24 billion in soft loans or financial facilities
This was reportedly agreed after the Prime Minister, Prayut Chan ocha, met with representatives of the airlines last year to discuss how they could keep flying.
Ended last year trying to keep 40 aircraft in the air with rising flight loads and buoyant expectations
It is understood that Thai Air Asia had been flying up to 40 aircraft out of its fleet capacity of 63 in the latter half of last year as it saw flight loads rising. Expectations were buoyant for an improvement and a good start to 2021 albeit in a new environment.
This has all come crashing down in the new year.
On Thursday, Mr Tassapon said that some flights had been taking to the skies, running expensive aircraft and deploying support staff, but only carrying 20 to 30 passengers at a time with already slashed and competitive airline rates.
The airline boss said he expected the current headwinds to exist at least until February with an even bleaker outlook not being ruled out.
He dismissed a move this week by authorities to create more holidays and said that the Chinese New Year holiday this year does not hold any improved prospect for the local carrier.
‘This could be the quietest Chinese New Year we’ve ever had,’ he assessed.
About the Author
Carla Boonkong is a magazine writer who writes extensively about woman’s issues in Thailand. One of her key subjects is the story of Thailand’s growing influence in the world and the role played by Thai women in the process. She is now a staff writer with Thai Examiner.com in Bangkok. Son Nguyen is an international writer and news commentator specialising in Thai news and current affairs. He commenced working with the Thai Examiner News Desk in May 2018.