Senior management from Thailand's airlines have met with the government to ask for $774 million in soft loans to help them survive the COVID-19 pandemic. On top of the loans, the airlines have also asked the government to extend the Airports of Thailand (AOT) 50% reduction in rents, terminal fees, and landing charges. The current deal, which began in April, is set to expire in December.

Thai Prime Minister Gen Prayut Chan-o-cha welcomed the airline bosses from Thai Smile, Thai AirAsia, Thai AirAsia X, Nok Air, Bangkok Airways, Thai VietJet, and Thai Lion Air, and accepted a letter from them asking for further assistance.

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Tourism has dried up

During the meeting, the Prime Minister acknowledged the effect that the coronavirus was having on the airline industry and the country as a whole. Reportedly, tourism revenue has all but dried up.

Worried about increasing coronavirus infections in Indonesia, the Philippines, and Vietnam, Thailand closed its borders to foreigners in April. Last month the government said that they would now keep the borders closed until at least 2021.

However, there is talk of opening the beach resort of Phuket to a limited number of people from October 1st as a test to see how well the country copes. The restrictions are so strict, though, that it is hard to imagine many people wanting to take advantage of the program the government is calling "Safe and Sealed."

Nok Air Thai AirAsia
Nok Air and Thai AirAsia top resume some domestic flights from September. Photo: Getty Images

Conditions for traveling to Phuket include the following:

  • 30 days mandatory stay in a hotel
  • The first 14 days must be spent in quarantine at the hotel
  • Several COVID-19 tests during your stay
  • After testing negative for three weeks, you can then travel to other parts of Thailand

Tourism is 12% of Thailand's GDP

In 2019, Thailand was the ninth most visited country in the world, welcoming 38.2 million tourists that contributed 12% of the nation's GDP. Airlines in Thailand have been seeking a loan from the government since April and hope that this latest meeting will yield positive results.

The Prime Minister said that he understood how vital the airlines were to Thailand and that he would look at their proposals and try to help.

The government also wants to help the airlines not to have to lay people off and incur additional liabilities due to the current situation. A couple of the suggestions brought forward by the airlines was to extend the tax break on aviation fuel as well as airport charges.

Thai Smile and Nok Air have applied for business rehabilitation

Thai Airways, the parent company of Thai Smile, filed for business rehabilitation in May and is now waiting for it to be approved by the court. Low-cost carrier Nok Air has also applied for business rehabilitation and will have its court hearing on October 27.

Thai AirAsia X Airbus 330-300 on final at Tokyo Narita
Australia remains an important market for the whole AirAsia brand. Photo: Getty Images 

In the statement put out by the Thai government about the meeting, there was no mention as to whether or not they would agree to the $774 million loans. There was also nothing mentioned about the terms of how it would be paid back if approved.

Currently, the airlines in Thailand have managed to keep 20,000 people employed, and it's hard to imagine the government not doing more to help.

Do you think the Thai government should help out its airlines? Please let us know your thoughts in the comments.