Thailand’s Civil Aviation Authority Probe Finances of Domestic Airlines

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BANGKOK -  Thailand’s civil aviation authority ordered all Thai-registered airlines on Tuesday to submit reports on their financial positions by March 31 to avoid the risk of having their operating licences revoked.

The move is part of the military government’s attempt to improve the country’s aviation standards after the U.S. Federal Aviation Administration downgraded Thailand’s safety ratings in December.

The Civil Aviation Authority of Thailand (CAAT) examined the financial status of Thai airlines late last year and found four small airlines had debt levels that could affect safety standards, Chula Sukmanop, the head of CAAT told reporters.

The four privately-owned airlines are City Airways, Asian Air, Kan Airlines and Jet Asia Airways, Chula said, adding CAAT had ordered City Airways to temporarily suspend its flights from February 19.

CAAT is also investigating pilots at budget carrier Nok Airlines after flight cancellations earlier this month due to shortage of pilots, Chula said.

Nok Air chief executive Patee Sarasin said last week the airline would use charter flights to serve passengers and expected to resume operations as normal in early March.

The ICAO downgraded Thailand’s rating in June 2015, giving it a red flag for missing a deadline to tackle safety concerns.

Meanwhile, Kan Air, one of four Thai-registered airlines alleged by the Civil Aviation Authority of Thailand (CAAT) to be in financial trouble, will file a lawsuit against authorities for defamation.

Somphong Sooksanguan, president of Kannithi Aviation Co, which operates Kan Air, said Tuesday that the CAAT’s public disclosure of the debts was unethical and critically damaging to the commuter airline’s creditability.

Along with Kan Air, CAAT director Chula Sukmanop has named City Airways, Asian Air and Jet Asia Airways — which operate mostly international charter flights — as having critical liquidity problems.

Unlike the others, Kan Air operates domestic flights mostly on secondary routes with two workhorses — a 66-seat ATR 72-500 turboprop and a 12-seat single-engine Cessna Grand Caravan 208B propeller aeroplane.

Mr Chula also threatened to suspend the airline operating licences granted to them as part of a restructuring of the Thai aviation industry to remove the red flag imposed by the International Civil Aviation Organization last year for aviation safety shortcomings.

To set the record straight, Mr Somphong told the Bangkok Post that the airline did borrow an additional 27 million baht to shore up cash flow as indicated by the CAAT but said 7 million of that amount came from his wife and most of the remaining 20 million from banks.

He said Kan Air must pursue legal proceedings to hold the CAAT to account for its inappropriate disclosure.