The Thai branch of the Malaysian discount airline AirAsia Group announced massive layoffs and extended mandatory holidays for its employees as it has been struggling to deal with the impact of the Covid-19 pandemic, which has brought the international tourism industry to a standstill. The statement was released after the airline announced its third-quarter data on November 15. The total revenue was 457 million baht ($13.9 million) and the net loss was 2.1 billion baht ($64.1 million). As part of the Thai government’s Covid-19 containment measures, all domestic airlines of Thai AirAsia were suspended from July 12 to September 2 this year. As a result, Thailand…
The Thai branch of the Malaysian discount airline AirAsia Group announced massive layoffs and extended mandatory holidays for its employees as it has been struggling to deal with the impact of the Covid-19 pandemic, which has brought the international tourism industry to a standstill.
The statement was released after the airline announced its third-quarter data on November 15. The total revenue was 457 million baht (13.9 million US dollars) and the net loss was 2.1 billion baht (64.1 million US dollars).
As part of the Thai government’s Covid-19 containment measures, all domestic airlines of Thai AirAsia were suspended from July 12 to September 2 this year. As a result, Thai AirAsia only carried 79,767 passengers in the third quarter, a 96% decrease from the same period last year.
The slow recovery of tourism is a major obstacle
The airline resumed its domestic operations on September 3 and increased its flight frequency accordingly. However, although Thailand opened its borders to foreign tourists on November 1, the tourism industry, which is the airline’s main target market, only sells snails in Thailand. The speed of recovery, despite the amount of paperwork required and frequent program changes.
Tassapon Bijleveld, the executive chairman of AirAsia, the largest shareholder of Thai AirAsia, said that the number of layoffs has not yet been determined. The list of layoffs will be announced in the last week of November, and the company will also launch an early retirement plan for employees who are willing to quit.
Many people who stayed at the airline are currently being forced to take vacations and face pay cuts. Bijleveld pointed out that the airline will assess the situation every two months and phase out cuts when the financial situation improves.
Plan to reduce the fleet to “maintain financial stability”
Due to the different reopening policies of various countries, the income of international routes is still limited. The airline also permanently reduced its fleet size from 60 to 54. He said that this measure is necessary to “maintain financial stability for a long time.”
However, Bijleveld added that the airline’s financial difficulties had “bottomed out” in the third quarter, and estimated that the Thai domestic market should fully recover in mid-2022, while international flights may gradually recover to 20% to 30%. At that time the level of 2019.
