Thai government likely to bail out eight airlines with $770 million aid

Thailand's finance ministry said that it has agreed in principle with the lifeline measures but has sought additional details from the airlines

Thailand's budget and full-service carriers can finally breathe easy as discussion with the country's Finance Ministry on loans of $770.675 million to bail out the ailing airlines has yielded positive feedback. As many as eight budget and full-service airlines have sought soft loans from the government to support their operations, one of the airlines executives said on Friday.

Airlines across the world have been bleeding following the coronavirus outbreak. Commercial airlines particularly have been the hardest hit with travel coming to have almost come to a halt, as governments continue to impose travel bans. This has seen airlines approaching respective governments to bail them out of the crisis.

Eight airlines get lifeline

AirAsia Pixabay

As many as eight budget and full-service carriers on Friday held a meeting with Thailand's Finance Ministry for soft loans worth 25 billion bhat as lifeline measure, as the industry continued to suffer due to the coronavirus crisis. Lavaron Sangsnit, director general of the Fiscal Policy Office said that the ministry has agreed in principle with the lifeline measures but has sought additional details from the airlines.

The eight airlines are Bangkok Airways, Thai AirAsia, Thai AirAsia X, Thai Lion Air, Thai Vietjet Air, Thai Smile, NokScoot and Nok Airlines. Commercial air travel has almost come to a standstill in Thailand, one of the major tourism hubs in Southeast Asia, as the coronavirus continues to spread. Thailand is expected to lose around 1.3 trillion bhat, most of it in the tourism sector.

The meeting between the carriers and the ministry, the first since coronavirus started spreading in the country three months ago, on Friday raised hopes that the eight airlines might finally be able to survive the crisis, said Nuntaporn Komonsittivate, head of commercial services at Thai Lion Air (TLA).

A separate negotiation to provide liquidity support to the ailing national carrier Thai Airways International is also ongoing. State owned Thai airports are expecting a 53% decline in passenger traffic for the fiscal year ending September and has started offering discounts for airlines.

Airlines gear up to resume operations

Lion Air
Lion Air Pixabay

Thailand's Finance Ministry although has hinted at approving the loan, didn't specify the amount or the interest rate, as more details are still sought from the airlines. However, of the 25 billion bhat proposed, Thai Lion Air has requested for a 3.75 billion bhat to pay its workers and restart operation from May 1.

However, Thai Lion Air has made it mandatory for all flyers to wear masks and maintain distance from other passengers. Also, the airline won't be selling food and drinks as a preventive measure. Thai AirAsia will also resume operations from May 1 but the services will only be for passengers who need to travel exclusively for personal or business reasons. Other airlines too are planning to resume operations soon.

Related topics : Coronavirus
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