Thailand to Offer $769 Million in Loans to Pandemic-Hit Airlines
Thailand to Offer $769 Million in Loans to Pandemic-Hit Airlines
(Bloomberg) --
The Thai government is set to offer 24 billion baht ($769 million) in loans to seven local airlines to help them counter the blow from the coronavirus outbreak as authorities firm up plans to revive tourism by gradually easing travel restrictions.
The so-called soft loans should be enough to help the airlines survive the pandemic and avoid laying off 20,000 workers, Thai AirAsia Co. Chairman Tassapon Bijleveld told reporters after a meeting with Prime Minister Prayuth Chan-Ocha in Bangkok Friday. The carriers may get loans from state banks, led by the Export-Import Bank of Thailand, for a five-year period, he said.
Thailand is throwing a financial lifeline to its carriers as airlines worldwide have asked for bailouts, cut salaries and furloughed staff amid a near shutdown in global travel. Prayuth’s government is also intensifying efforts to revive the tourism and trade reliant economy that’s on course for its worst crisis ever.
“The government is considering many relief measures and looking to find ways to ease flight restrictions, as well as measures to allow tourism in the country,” Prayuth said in a statement following a meeting with airline operators. “I ask the airline sector to cooperate more during this time, stop competing with prices but with services instead, and don’t increase debt and conduct layoffs.”
Tourism Collapse
The collapse in Thailand’s tourism industry due to international border restrictions and global lockdowns widened losses at Thai Airways International Pcl and budget carrier Nok Airlines Pcl, prompting them to seek restructuring under the country’s bankruptcy law. Foreign tourist arrivals into Thailand is forecast to plunge to 8 million this year from about 40 million a year earlier.
The seven airlines set to receive financial aid from the government include AirAsia Group Bhd.’s Thai AirAsia and its long-haul unit, Thai AirAsia X, Bangkok Airways Pcl, Nok Airlines, Thai Smile Airways Co. Ltd., Thai Lion Air and Thai Vietjet Air.
The airlines have also requested an extension in reduction of excise taxes for jet fuel, Thai AirAsia’s Tassapon said. The government agreed to extend the lower airline-related fees, which includes parking and landing charges, to March 2022, he said.
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