Bangkok extends $187mn in aid to five Thai carriers
The Export-Import Bank of Thailand (EXIM Thailand) has extended THB6.2 billion bahts (USD187 million) in support to five airlines – Thai Airways International, Thai Smile, Thai AirAsia, Thai VietJetAir, and Bangkok Airways – to help them survive an acute liquidity crisis brought on by the COVID-19 pandemic.
Bank president Rak Vorrakitpokatorn told local media that the support comprised THB3.5 billion (USD105.5 million) in debt forgiveness and a further THB2.7 billion (USD81.5 million) in additional credit lines to preserve liquidity and staff. The Ministry of Finance said the state-owned bank had been authorised to provide a total of THB20 billion (USD603 million) in support to the airlines, although Rak underlined that EXIM Thailand would monitor the market carefully before disbursing any further funds. Priority would also be given to airlines that commit to retaining their employees, it said.
Rak stressed that the Thai airline industry had started to rebound in the fourth quarter of 2021 as tourists started to return thanks to relaxed entry restrictions. However, the reimposition of stricter rules in mid-December in response to the Omicron variant had cast uncertainty on the recovery.
He did not disclose the amounts that each of the beneficiary airlines had received. EXIM Thailand revealed that the country’s two other major carriers, Nok Air (DD, Bangkok Don Mueang) and Thai Lion Air (SL, Bangkok Don Mueang), did not request support from the bank. Nok Air is currently undergoing restructuring with the financial support of its shareholders, while Thai Lion Air has received lifeline financing from its parent holding, Lion Air Group.
The bank’s intervention comes 18 months after the Thai government tentatively approved plans to support local airlines. In June 2020, the Ministry of Finance gave a preliminary nod to THB24.15 billion (USD775 million at that time) in loans to eight airlines, including NokScoot (XW, Bangkok Don Mueang), which has since been liquidated, none of which was ever disbursed, causing significant resentment among the carriers. Nok Air decided to pursue shareholding recapitalisation and potential joint ventures as an alternative, while Thai AirAsia is undergoing a THB14 billion (USD415 million) recapitalisation.