Thai Airways may cut some plane types for good after grounding jets

© Reuters. Thai Airways airplanes are parked at the tarmac of Suvarnabhumi Airport in Bangkok

BANGKOK (Reuters) – Thai Airways International Pcl (BK:) may permanently reduce the number of aircraft types it deploys once the coronavirus outbreak that has caused the company to ground most of its fleet ends, said a senior government official on Monday.

Thai Airways is grounding 69 of its 82 jets following a drop in passenger volume and route cancellations from the increased border restrictions imposed by the pandemic, the state-owned airline said in a statement earlier on Monday.

The airline’s board and management will come up with two plans by next month, the first to get the carrier through the coronavirus outbreak and another for business rehabilitation, Deputy Transport Minister Thaworn Senniam, the government official responsible for Thai Airways, said on Monday.

“The rehabilitation plan must be done fast because by October, if COVID subsides, we will need to deliver services to travelers and tourists,” Thaworn said, referring to the respiratory disease caused by the coronavirus.

He added that sales and leasebacks of airplanes and other types of capital injections were being considered.

“We have to reduce aircraft types to as much as possible to reduce cost … we can take out old aircraft, replace them with new ones through leasing or other procurement methods,” he said adding the plans should be done by next month.

Thai Airways was already facing financial trouble, reporting losses since 2017. Losses in 2019 widened to 12.2 billion baht ($385 million) from losses of 11.6 billion baht a year earlier.

The coronavirus outbreak and the resulting travel restrictions limiting tourism in Thailand has exacerbated the airline’s decline.

The government last week banned entry to foreigners and declared a state of emergency to combat the disease.

Thailand on Monday reported 136 new coronavirus cases, raising the total number of infections in the country to 1,524.

Nine people have died.

The flag carrier had canceled nearly all of its international routes after its president resigned amid the outbreak.

The airline said last year it was reviewing long-delayed plans to purchase 38 jets for its expansion plan.

Other Thai airlines are also suffering amid the pandemic.

Regional carrier Bangkok Airways Pcl (BK:) said it was suspending 20 international routes and 10 domestic routes until October, with staff taking salary cuts of 10% to 50%.

Budget carrier Thai AirAsia is hibernating its fleet after suspending its international and domestic flights, its largest shareholder, Asia Aviation Pcl (AAV) (BK:) said.

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