Low-cost airline carrier NokScoot plans on laying off a large number of its employees, as the company faces the considerable impact of the coronavirus pandemic across the whole transport sector.
Thai AirAsia, an airline company based in Thailand, warned the government that more airlines may follow suit if they are not granted loans meant to alleviate the brunt of their operational losses.
NokScoot, in a statement released on Wednesday, said that a review of their operations led it to take steps to rationalize the business to cope with the significant impact of the coronavirus pandemic.
NokScoot, a joint venture of Nok Airlines Plc and Singapore-based Scoot, added:
“Despite some early signs of stabilizing, demand for air travel is not expected to return to 2019 levels until 2022 or 2023.”
NokScoot’s five-plane fleet will be reduced to three aircraft, which will be returned to the parent company in Singapore by the end of June.
More than 50% of NokScoot’s labor workforce will also be laid off.
All affected employees of NokScoot will be paid severance in accordance with Thai labor laws.
The executive chairperson of Asia Aviation (AAV), and largest shareholder of Thai AirAsia (TAA), Tassapon Bijleveld, substantiated:
“If the government does not approve the soft loans airlines have requested, when Thailand opens to international travellers there may not be enough jets to serve them, as many airlines have serious cash flow problems.”
NokScoot is among the eight airlines requesting aid through the government-funded 24-billion-baht scheme to help the air transportation sector.
Thai Airways has already filed for bankruptcy reconstruction with the Central Bankruptcy Court with a hearing due in August.
Source: Bangkok Post