BANGKOK. Treasury Secretary Arkhom Termpittayapaisith has responded with many reservations to calls for the government to provide low-interest loans as a lifeline for weak airlines.
The Export-Import Bank of Thailand (Exim Bank) has been tasked with developing a financial measure to help the weak airlines, but the bank has yet to submit its proposal to the Treasury Department, Minister Arkhom said.
Providing low interest loans to airlines or adding such business loans to the public service account means the Treasury Department has to bear the difference between market and low interest loan rates, he said.
Other sectors can also ask the government to lend if the administration offers low-interest loans to airlines, he added.
A fleet of Thai Airways aircraft stands at Suvarnabhumi International Airport. The aviation sector has been hard hit by the Covid-19 pandemic. Somchai Poomlard
Airlines appeared to be gradually recovering before the second Covid-19 outbreak hit Thailand and further investigation of each airline needs to be done to assess the extent of the impact, he said.
In January it was reported that Exim Bank was planning to propose a loan measure to the Treasury Department in early February to increase liquidity for crippled airlines and to keep staff.
The proposal emphasizes that it should help airlines retain their employees by offering financial liquidity through loans, said Pisit Serewiwattana, president of Exim Bank.
The size of the loans will depend on the cost of hiring staff for each airline, Pisit said. While most loan terms are yet to be disclosed, loans are mainly being offered to Thai airlines, he said.
The aviation industry is among the sectors hardest hit by the pandemic as countries have had to strictly restrict foreign arrivals due to a continued surge in infections worldwide.
It has been reported that Thai AirAsia only employs a quarter of its workforce and is asking the rest to bid for four months without pay from February as a second wave outbreak hits the aviation sector.
The vacation, the second in recent months, is larger than the first round at the end of last year.
Nuntaporn Komonsittivate, the head of commercial business at Thai Lion Air (TLA), said the airlines had teamed up and requested a government bailout since April 2020.
Although most of them wanted to secure the soft loan, the airlines did not include this loan in their future plans as the program was delayed several times over the past year.
“We couldn’t just wait aimlessly. Airlines have already streamlined operations to reduce their fixed costs. If the government cannot allocate funding, we will have to find Plan B ourselves, ”said Ms. Nuntaporn.
Before the new outbreak, low-cost airlines saw positive prospects for domestic routes as demand for travel picked up positively from the third quarter of 2020.
However, due to the lockdown in many provinces, the average occupancy factor fell to its lowest point in January 2021.
The average number for TLA this month only rose to 30% but is still low compared to the normal situation.
“Most of us will struggle to find another way to stay afloat. It could be worse if another wave of Covid-19 hits, ”said Ms. Nuntaporn.
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