Tuesday, December 16, 2008

Thailand's Airlines seek redress for PAD action

GENEVA : International airlines are asking Thailand to pay for the cost of disruption and loss of revenue resulting from the eight-day seizure and shutdown of Suvarnabhumi Airport by anti-government protesters.

They do not want to see the costs incurred by Airports of Thailand (AoT), which operates Bangkok's international airport, as it might have to raise airport charges and thus affect carriers that are already struggling in a poor economy.

The International Air Transport Association (IATA), which represents 230 airlines accounting for 93% of scheduled international air traffic worldwide, outlined its stance in a letter sent last week to Serirat Pasutanond, the acting president of AoT.

Though the Geneva-based body is acting on behalf of the industry, many of the nearly 100 carriers that operate through Suvarnabhumi are individually considering which parties are liable for the extensive financial damage inflicted by the seizure of Suvarnabhumi and Don Mueang airports in order to pursue compensation.

Thai Airways International (THAI), which bore the brunt of the impact with 20 billion baht in damage, has already resolved to sue leaders of the People's Alliance for Democracy (PAD) for compensation equivalent to its disruption costs and loss of future revenue.

Meanwhile, the AoT board last Thursday decided to sue the PAD seeking compensation for the damage caused to all six of its airports including Suvarnabhumi, estimated at 64 million baht a day plus unspecified lost opportunity costs.

Jeff Poole, director for industry charges, fuel and taxation at IATA, told the Bangkok Post: "We want to see the costs of disruption and revenue 'ring-fenced' either by AoT or the Thai government. We don't want to see those charges coming to the airlines."

IATA suggested that the Thai government could follow the precedent set by the US government, which compensated airlines and others in the travel industry after the 9/11 terrorist attacks.

It has offered to work with AoT to identify the costs and make sure they are not passed on the airlines, according to Mr Poole.

IATA officials stopped short of blaming PAD demonstrators for laying siege the airports from Nov 25 and Dec 3. "We will not get involved in internal political problems," IATA director-general Giovanni Bisignani said.

Separately, Georgina Graham, the director for security and facilitation at IATA, said the seizure of the two airports was not strictly speaking a breach of security.

"They (PAD activists) weren't inside the airports' security restricted area, but they were outside the airport. What they did was to prevent the normal movement of traffic into the airports," she said.

"So they used the airports to make a political statement, they did not actually breach security restricted areas. This is more a national security issue rather than aviation security."

In any case, Mr Poole said the industry wanted to see much stronger security taken up. "There has to be the right level of security and the right balance so that higher security costs being passed on to the airlines."

IATA has commended AoT for getting the airports back to operating effectively and quickly.

Mr Poole suggested that the Thai state-controlled airport company waive landing and parking fees for airlines for six to 12 months, just to get them back.

AoT reported that passenger traffic through Suvarnabhumi fell to an average of 55,737 a day after it resumed normal operations on Dec 5, down from about 100,000 in the pre-seizure period.

The number of flights dropped to a daily average of 496, from 714 previously, while cargo throughput declined to 2,395 tonnes per day from 3,365 tonnes.

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