Budget airlines operating to and from Thailand have called for help in the face of losses attributed to falling demand, high fuel taxes and a strong baht.
Thai AirAsia, Nok Air, Bangkok Airways, Thai VietJet Air and Thai Lion Air have called on Thailand’s finance ministry to reduce the excise tax on jet fuel.
Tassapon Bijleveld, executive chairman of Asia Aviation (AAV), the largest shareholder of Thai AirAsia, said low-cost airlines have absorbed heavy operating costs because of the increase in the excise tax on jet fuel to 4.726 baht per litre from just 0.2 baht per litre over the last two years.
Thai AirAsia has reduced flight numbers by 15% during the last four months, cutting the frequency of flights to Chiang Mai, Phuket, Krabi and Khon Kaen, Mr Tassapon told the Bangkok Post.
Asia Aviation Plc and Thai AirAsia Co. Ltd. (TAA) chief executive Santisuk Klongchaiya said, “The operational performance in 3Q2019 is recovering from the previous quarter, reflected by a decent number of tourists, especially from China.
“The business, however, had remained under pressure from competitive pricing and continual appreciation of the Thai baht, which negatively impacted on foreign travellers’ appetite to visit Thailand.”
Mr Tassapon added, "Every airline is facing losses. If there is no proper solution on the excise tax on jet fuel, some low-cost airlines might have to reduce the size of operations or even stop operating next year."