Officials in Thailand have acknowledged the reasons for which the United States downgraded the country’s aviation industry.
Weaknesses arose after growth outpaced the ability of regulators to keep track of developments, said Thai officials. The U.S. Federal Aviation Administration (FAA) downgraded Thailand to “category 2” this Tuesday, according to The Associated Press.
This Tiger Cub Giant Is Betting On Banks And Tech Stocks In The Recovery
The first two months of the third quarter were the best months for D1 Capital Partners' public portfolio since inception, that's according to a copy of the firm's August update, which ValueWalk has been able to review. Q2 2020 hedge fund letters, conferences and more According to the update, D1's public portfolio returned 20.1% gross Read More
FAA downgrades Thailand’s aviation authority
A category 2 rating means that a nation’s civil aviation authority has deficiencies in one or more critical areas, or laws and regulations overseeing airlines are not sufficient.
“Thailand does not comply with International Civil Aviation Organization safety standards,” the FAA statement said. The U.S. body audited the Thai aviation authority in July.
As a result of the move Thai carriers will be unable to begin serving new routes to the U.S. The FAA raised 33 main concerns, including a lack of manpower and training, alongside problems with the vetting of pilot licenses.
Thai airlines could be affected by restrictions on operations
“We had limitations in training our people to become inspectors,” Arkhom said. “We have 2,300 pilots and they have to renew their permits. We don’t have enough people to inspect and grant the permits.”
Thailand earns 7% of its GDP from tourism, and is one of the most popular destinations in the world. It is thought that the FAA ruling could lead to measures being taken against Thai airlines by authorities around the world.
If the European Aviation Safety Agency also downgrades Thailand, there could be a freezing of flights to Europe by Thai carriers. Existing routes would continue unaffected, but airlines might not be able to add new flights, change routes or use different types of aircraft.
The Thai government started working on improving its civil aviation authority following an initial negative assessment in March, but there was not enough time to fix all of the problems.
There are currently 28 Thai airlines serving international routes, and their recertification will be a priority. The negative rating could be corrected before August 2016, pending a future inspection.
National flag carrier Thai Airways has been suffering economically, and currently serves 11 European destinations. The airline’s international President Charamporn Jotikasthira said that business would suffer if European restrictions were not removed by 2017.