Thai airline shares jump as UN agency lifts ‘red flag’

BANGKOK: The UN International Civil Aviation Organisation has removed a red flag against Thailand over safety concerns, the Civil Aviation Authority of Thailand said on Monday, sending shares in Thai airlines sharply higher.
Thailand was downgraded in June 2015 after its regulator missed a deadline to resolve significant safety concerns, meaning that airlines in Thailand were unable to add further international routes, though they could continue to operate routine flights.
The Thai aviation authority said the 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 which appeared against Thailand on its website 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 website.
CAAT Director General Chula Sukmanop told a news conference the removal of the red flag would give Thai airlines a chance to start new flights to China, Japan and South Korea.
Shares in Thai Airways climbed nearly 8 per cent on the news before falling back to trade at over 5 per cent higher.
Shares in Asia Aviation, which operates as Thai Air Asia, rose as much as 5 per cent and later traded up nearly 4 per cent.
Shares in airport operator Airports of Thailand rose over 2 per cent.
The biggest beneficiaries of the decision 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,” she added.— Reuters

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