Thai airlines can now add flights to the growing China, South Korea and Japan markets after the International Civil Aviation Organization (ICAO) removed a red flag against Thailand over safety concerns, officials said yesterday.
Thailand was downgraded in June 2015 after its regulator missed a deadline to resolve significant safety concerns, meaning airlines were unable to add further international routes, although they could continue to operate routine flights.
The Civil Aviation Authority of Thailand (CAAT) said that ICAO had made the decision after a meeting on Friday.
The Montreal-based UN agency was not immediately available for comment, but the red flag that appeared against Thailand on its Web site had disappeared.
“Although lifting the red flag is a significant turning point for her aviation industry, Thailand as well as CAAT need to carry on their missions to improve the aviation safety standards,” the CAAT said on its Web site.
Shares of Thai Airways climbed nearly 8 percent on the news before falling back to trade at over 5 percent higher. Asia Aviation, which operates as Thai Air Asia, rose as much as 5 percent and later traded up nearly 4 percent. Airport operator Airports of Thailand rose more than 2 percent.
The biggest beneficiaries would be smaller carriers, such as Thai AirAsia X, NokScoot and Thai Lion, said Corrine Png, CEO of Singapore-based transport research firm Crucial Perspective.
“The ICAO downgrade had seriously impeded these new entrants’ growth to lucrative markets, such as Japan and South Korea,” she said. “These airlines can now grow more aggressively. This would, however, imply increased competition for Thai Airways when they expand.”
Thai AirAsia X chief executive Nadda Buranasiri said his airline was studying new routes, including to Hokkaido in Japan, after the red flag was lifted.
“We will likely increase routes and frequencies for China, South Korea, and Japan,” he said yesterday, adding that Thai AirAsia X now hoped to add three to four aircraft to its fleet next year.
Nok Airlines vice chairman Patee Sarasin said new routes would be added as slots became available.
Thai Airways lacks enough aircraft to take advantage of the situation and expects rivals will boost routes to other Asian nations, said a source at the national carrier who declined to be named because he was not authorized to speak to the media.
Thai Airways declined to comment.
CAAT Director-General Chula Sukmanop told a news conference that he expected Thailand would regain a Category One status from the US Federal Aviation Administration, which also downgraded Thailand in 2015. The downgrade meant Thai carriers could not start new routes to the US.
ICAO’s red flag was based on its audit of the regulatory body, rather than individual airlines. Several major Thai airlines, including Thai Airways, Bangkok Airways, Thai Lion and NokScoot, have passed the International Air Transport Association Operational Safety Audit, a benchmark for global safety management in airlines.
Aviation safety is particularly important for Thailand given that tourism accounts for about 12 percent of its economy, the second largest in Asia.
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