Covid made the worst situation in Thailand Aviation

The COVID-19 restrictions have hit the aviation industry hard to Thailand Aviation Industry. As a result, every aviation company has been attempting to implement innovative methods for relocating its losses and achieving a better start. But things aren’t looking good for Thailand’s aviation industry, which is still on the decline.

Photo: Thai Airlines Boeing 777 airborne from TIA

On July 31, the Civil Aviation Authority of Thailand (CAAT) announced the loss of the Thai aviation industry, citing uncertainty over the Covid-19 pandemic among Thai and foreign tourists. It added that in the second quarter of this year, the number of passengers and flights fell by 35.5 percent and 27.8 percent, respectively, compared to the same period last year. Meanwhile, the volume of air freight has increased by 0.01 percent over the same period last year, according to the report.

According to the CAAT, the tourism sector’s poor recovery has impacted the aviation industry because Thailand was unable to lift quarantine restrictions by the second quarter of this year, despite the fact that the crisis is expected to last longer.

It continued, several unfavorable activities affected the aviation business, such as the vaccination rate and a sluggish rebound in the tourism sector, citing the Bank of Thailand’s estimate.

“The authority does not foresee the aviation business to recover considerably this year,” the CAAT added, “As the Covid-19 situation worsens and Thailand imposes travel restrictions that directly harm the tourism sector.”

Covid made the worst situation in Thai Aviation

Last year, Thai Airways International (THAI), Thailand’s financially distressed airline, reported a staggering net loss of 141 billion baht following Covid-19. THAI and its subsidiaries made a total of 48.3 billion baht in revenue, with expenses of 96.4 billion baht.

There is an apparent lack of coordination in Thailand’s action. There is a lack of health consciousness and better measures for the mitigation of the spread of the Virus. The Thai government has attempted to compel the national carrier’s privatization. 

Photo: Thai Airways B777 ‘HS-TJW’ landed on RWY-20 TIA, Nepal

The government needs to react faster to provide 100 million doses of COVID-19 Vaccines within this year because the country’s tourism season will begin from October this year. According to the prior prediction, the number of foreign visitors visiting Thailand this year is predicted to decline to 700,000, with 10 million expected next year, down from 3 million this year and 21.5 million in 2022.

Global airline Industry at a loss

In 2020, the airline industry was expected to lose $126.4 billion, with a net profit margin of minus 33.9 percent. This resulted in a 50% reduction in the number of seats supplied by airlines, a drop of 2,699 million passengers (a 60% drop), and a loss of $371 billion in gross passenger net earnings for airlines compared to 2019.

In 2021, the International Air Transport Association (IATA) forecasts net airline losses of 47.7 billion dollars, with a net profit margin of minus 10.4%. Net losses are predicted to drop from a negative 31.1 percent of sales in 2020 to minus 8.8 percent this year.

While the airline sector is seeing a significant drop in passenger income, the expansion of cargo services has somehow compensated for the industry. Cargo sales are likely to hit a new high of 152 billion dollars. This is an increase from 128 billion in 2020 and 101 billion in 2019.

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