Thai AirAsia plans mass layoffs, fleet reduction
The Thailand-based arm of Malaysian discount carrier AirAsia Group, Thai AirAsia, has announced mass layoffs and extended forced holidays for staff as it keeps struggling with the impact of the Covid-19 pandemic which put international tourism to a standstill.
The statement comes after the airline reported third quarter figures on November 15, with total revenue of 457 million baht ($13.9 million) and a net loss of 2.1 billion baht ($64.1 million).
All domestic routes of Thai AirAsia were suspended between July 12 and September 2 this year as part of the Thai government’s Covid-19 containment measures. As a result, Thai AirAsia transported just 79,767 passengers in the third quarter, down by 96 per cent from the corresponding period last year.
Slow recovery of tourism a major hurdle
The airline resumed domestic operations on September 3 and increased flight frequencies accordingly, but tourism – the carrier’s main target market – is only recovering at a snail’s pace in Thailand despite the nation opened its borders to foreign tourists on November 1, albeit with a lot of paperwork required and frequent procedure changes.
Tassapon Bijleveld, executive chairman of Asia Aviation, the largest shareholder of Thai AirAsia, said the exact number of job cuts has not been determined yet. A list of employees to be laid off would be announced in the last week of November, and the company would also launch an early retirement programme for those who are willing to leave by choice.
Many who remain employed with the airline are currently on forced holidays and faced with pay cuts. The airline would assess the situation every two months and gradually remove the cuts when the financial situation improves, Bijleveld noted.
Fleet reduction planned to “maintain financial stability”
The carrier would also permanently reduce its fleet size to 54 planes from 60 as revenue from international routes is still limited due to different reopening policies from country to country. The measure was necessary to “maintain financial stability in the long run,” he said.
Bijleveld, however, added that the financial distress of the airline had already “bottomed out” in the third quarter and estimated that the domestic market in Thailand should fully recover by mid-2022, while international flights might gradually return to 20 to 30 per cent of 2019 levels by that time.
The Thailand-based arm of Malaysian discount carrier AirAsia Group, Thai AirAsia, has announced mass layoffs and extended forced holidays for staff as it keeps struggling with the impact of the Covid-19 pandemic which put international tourism to a standstill. The statement comes after the airline reported third quarter figures on November 15, with total revenue of 457 million baht ($13.9 million) and a net loss of 2.1 billion baht ($64.1 million). All domestic routes of Thai AirAsia were suspended between July 12 and September 2 this year as part of the Thai government’s Covid-19 containment measures. As a result, Thai...
The Thailand-based arm of Malaysian discount carrier AirAsia Group, Thai AirAsia, has announced mass layoffs and extended forced holidays for staff as it keeps struggling with the impact of the Covid-19 pandemic which put international tourism to a standstill.
The statement comes after the airline reported third quarter figures on November 15, with total revenue of 457 million baht ($13.9 million) and a net loss of 2.1 billion baht ($64.1 million).
All domestic routes of Thai AirAsia were suspended between July 12 and September 2 this year as part of the Thai government’s Covid-19 containment measures. As a result, Thai AirAsia transported just 79,767 passengers in the third quarter, down by 96 per cent from the corresponding period last year.
Slow recovery of tourism a major hurdle
The airline resumed domestic operations on September 3 and increased flight frequencies accordingly, but tourism – the carrier’s main target market – is only recovering at a snail’s pace in Thailand despite the nation opened its borders to foreign tourists on November 1, albeit with a lot of paperwork required and frequent procedure changes.
Tassapon Bijleveld, executive chairman of Asia Aviation, the largest shareholder of Thai AirAsia, said the exact number of job cuts has not been determined yet. A list of employees to be laid off would be announced in the last week of November, and the company would also launch an early retirement programme for those who are willing to leave by choice.
Many who remain employed with the airline are currently on forced holidays and faced with pay cuts. The airline would assess the situation every two months and gradually remove the cuts when the financial situation improves, Bijleveld noted.
Fleet reduction planned to “maintain financial stability”
The carrier would also permanently reduce its fleet size to 54 planes from 60 as revenue from international routes is still limited due to different reopening policies from country to country. The measure was necessary to “maintain financial stability in the long run,” he said.
Bijleveld, however, added that the financial distress of the airline had already “bottomed out” in the third quarter and estimated that the domestic market in Thailand should fully recover by mid-2022, while international flights might gradually return to 20 to 30 per cent of 2019 levels by that time.
