Three Thai airlines face CAAT clampdown

Chula Sukmanop, head of the Civil Aviation Authority of Thailand (CAAT) says the government's jihad on zero-dollar tours by Chinese has caused a crisis for three airlines he did not name. (File photo by Somchai Poomlard)

Three Thai-registered airlines are experiencing a financial crunch after their operations were severely affected by a sharp drop in Chinese tourists.

The Civil Aviation Authority of Thailand (CAAT) ordered the three airlines to devise financial rehabilitation plans in response.

The number of tourists from mainland China to Thailand has fallen significantly after the government launched a major crackdown on zero-dollar tour scams in September.

CAAT director Chula Sukmanop said he instructed the airlines, which operate flights to international destinations mainly in China, to work on solutions to their financial problems and submit their plans to the agency this month.

If the airline operators fail to meet the deadline, they could face tough measures including a suspension of their service, Mr Chula said. He declined to name the airlines.

The CAAT's move came after the airlines faced liquidity constraints and were unable to pay their debts including fuel costs and other expenses at airports overseas.

Revenues for the airlines fell sharply following the government's clampdown on zero-dollar tour networks operated by the Chinese.

"The CAAT will consider whether the financial rehabilitation plans are feasible. However, the service suspension will depend on Prime Minister Prayut Chan-o-cha's decision," Mr Chula said.

However, he said the agency has yet to order the three airlines to stop ticket sales as their financial problems were caused only on some routes such as those to China, he said.

According to Suvarnabhumi Airport general manager Sirote Duangratana, the number of Chinese tourists entering Thailand per day via the airport dropped to 4,000 from 13,000 in August.

In September, authorities raided OA Transport Co and seized its 2,150 tour buses and confiscated 4.7 billion baht from its bank accounts and those of its affiliates.

The company, which was the main bus provider for Chinese tourists, is accused of illegally conducting businesses in connection with zero-dollar tour scams. Company executives have denied the allegation.

Tour agencies have cried foul, saying about 70% of tour groups from China cancelled their trips following the incident.

Sports and Tourism Minister Kobkarn Wattanavrangkul said she will call a meeting of operators concerning Chinese tour businesses this week to discuss their problems and the government's policy on the zero-dollar tour crackdown.

Ms Kobkarn remains confident that the number of Chinese tourists this year will reach 9.2 million, compared to 7.9 million last year.

Zero-dollar tours involved Chinese visitors paying low prices for tour packages but once in Thailand, they were pressured into buying overpriced food, accommodation and gifts.