Thai Airlines Safety Improved Opens New Routes to China, Korea and Japan

BANGKOK – Thai airlines would now be able to add flights to the growing China, South Korea and Japan showcases after the U.N. International Civil Aviation Organization removed a red flag against Thailand over safety concerns, authorities said.

Thailand was demoted in June 2015 after its regulator missed a due date to resolve critical safety concerns, implying that airlines were unable to add further international routes; however they could keep on operating routine flights.

The Civil Aviation Authority of Thailand (CAAT) said the ICAO had settled on the decision after a meeting. The Montreal-based U.N. agency was not immediately accessible for comment, but rather the red flag which showed up against Thailand on its website had vanished.

“Although lifting the red flag is a significant turning point for her aviation industry, Thailand as well as CAAT needs to carry on their missions to improve the aviation safety standards,” the CAAT said on its website.

Shares in Thai Airways increased almost 8 percent on the news before falling back to trade at more than 5 percent higher. Shares in Asia Aviation, which works as Thai Air Asia, ascended as much as 5 percent and later traded up about 4 percent. Shares in airport operator Airports of Thailand rose over 2 percent.

The biggest beneficiaries would be smaller carriers, such as Thai AirAsia X, NokScoot and Thai Lion, said Corrine Png, the 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 CEO Nadda Buranasiri said his airline was examining new routes, including to Hokkaido in Japan, after the red flag was lifted.

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“We will likely increase routes and frequencies for China, South Korea, and Japan,” he told Reuters on Monday, adding Thai AirAsia X now hoped to add three to four aircraft to its fleet next year.

Nok Airlines PCL Vice Chairman Patee Sarasin said new routes would be added as slots became available.

Thai Airways lacks enough aircraft to take advantage of the circumstance and expects rivals will increase routes to other Asian countries, said a source at the national carrier who declined to be named on the grounds that he wasn’t authorized to speak the media. Thai Airways declined to comment.

CAAT director general Chula Sukmanop told a news meeting that he expected Thailand would regain a Category One status from the U.S. Department of Transportation’s Federal Aviation Administration (FAA), which also demoted Thailand in 2015. The FAA demoted meant Thai carriers couldn’t begin new routes to the United States.

The CAAT said its aim was to be at “the world’s forefront” in safety and achieve the global average in every safety category. Actions were still needed to address findings of an ICAO inspection in January 2015 and an audit in July, it said.

ICAO’s red flag was based on its audit of the regulatory body, instead of individual airlines. Some major Thai carriers, 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 represents around 12 percent of its economy, the second biggest in Asia.

The countries which still have red flags against them are Djibouti, Eritrea, Haiti, Kyrgyzstan and Malawi, according to the ICAO list.

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