Thai AirAsia mulls merger with rival LCCs

Thai AirAsia (FD, Bangkok Don Mueang) has initiated talks with rival low-cost carriers about a potential merger given the havoc the COVID-19 pandemic has wrought on the tourism-dependent and heavily competitive Thai market, Chairman and main shareholder Tassapon Bijleveld told The Bangkok Post. Tassapon refused to name the parties he was in talks with about the potential merger. However, he said that in his opinion, the Thai market could only support up to three LCCs in the long-term. In pre-COVID times, the country was home to Thai AirAsia and its long-haul arm Thai AirAsia X, Nok Air with NokScoot, Thai VietJetAir, Thai Lion Air, and Thai Smile with Thai Eastar Jet undergoing certification. “A merger is possible if aviation in Thailand resumes with the same old fiery price wars, as now we have more limited revenue sources,” he said. He underlined that while the LCC has so far endured the crisis with some salary cuts and furloughs but no outright lay-offs and aircraft retirements, its future was now “hanging in the balance”. If Thailand does not reopen to international tourism by July, Thai AirAsia will have to start downsizing staff and fleet. Tassapon said that the carrier’s cash burn currently stands at around THB1.2 billion bahts (USD37.7 million) per month. He also admitted that it was likely Thai AirAsia would post “unprecedented losses” in 2020, regardless of the development of the market in the second half of the year.