Thai AirAsia (TAA) airline has announced mass layoffs and extended vacation days after struggling with the effects of the pandemic, despite the country’s reopening on Nov. 1.
Tassapon Bijleveld, the chairman of Asia Aviation (AAV), the largest shareholder of TAA, informed TAA employees of the decision on Monday. He said the real situation regarding the aviation outlook remains unstable, forcing the company to downsize its fleet next year and consequently cut its workforce to maintain long-term financial stability.
“While we have negotiated with suppliers and banks to reduce aircraft lease costs, and we may gain additional liquidity after the restructuring this month, our balance sheet cannot be strong enough if those costs are still there.
We must permanently reduce the fleet for at least two years or until international and domestic flights are fully restored.”
The fleet will be reduced from 60 to 54 aircraft, as revenues from international routes are still limited due to different reopening policies from country to country.
Tassapon further announced that the airline has already bottomed out in the third quarter. The domestic market should be able to fully recover by mid-2022, while international flights could gradually return to 20 to 30 per cent of 2019 levels.
The best-case scenario for international routes is for TAA to resume half of its pre-pandemic scheduled flights by the end of next year.
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