April 24, 2020 / 11:09 AM / a month ago

Eight Thai airlines seek $770 million government assistance

BANGKOK (Reuters) - Thailand’s budget and full-service carriers are seeking soft-loans worth 25 billion baht (624.45 million pounds) from the government to support their businesses amid the coronavirus outbreak, an airline executive said on Friday.

FILE PHOTO: A Thia Air Asia Airbus A320-200 plane prepares for take off at Don Mueang International Airport in Bangkok, Thailand, June 29, 2016. REUTERS/Chaiwat Subprasom

Commercial air travel has all but stopped as the coronavirus continues to spread and Southeast Asia’s second-largest economy stands to lose 1.3 trillion baht, most of it in the tourism sector.

The eight airlines will negotiate the terms of the proposed assistance, which includes soft loans worth 25 billion baht with a 2% interest rate that can be paid off over five years starting in 2021, Thai AirAsia Chairman, (AAV.BK) Tassapon Bijleveld, who has been speaking on behalf of the group, told reporters.

The eight airlines included, Bangkok Airways Pcl (BA.BK), Thai AirAsia, Thai AirAsia X, Thai Lion Air, Thai Vietjet Air, Thai Smile, NokScoot and Nok Airlines Pcl (NOK.BK), local media reported.

The package will provide liquidity for the airlines, Tassapon said, adding that they were looking for a 6.25 billion baht disbursement, worth a quarter of the credit facility, to begin this month.

However, further discussions with the government were required.

“We agree with the operational guidelines, but there are still details that require the airlines to do homework,” said Lavaron Sangsnit, Director-General, Fiscal Policy Office.

State-owned Airports of Thailand said that it expects passenger traffic to drop 53% for the fiscal year ending in September and had begun offering discounts for airlines.

A separate negotiation for the government to provide liquidity support the national carrier, Thai Airways International Pcl (THAI.BK) was also ongoing.

The country’s aviation regulator in early April imposed a ban on passenger flights until the end of the month to curb the spread of the virus. The government had already banned the entry of non-resident foreigners in March.

Thailand has reported a total of 2,854 cases and 50 deaths from the new coronavirus.

Reporting by Kitiphong Thaichareon, Writing by Chayut Setboonsarng; Editing by Simon Cameron-Moore

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