Bangkok, December 2

Thai Prime Minister Prayuth Chan-ocha today ordered officials to improve aviation safety standards after the US Federal Aviation Administration (FAA) downgraded Thailand’s safety ratings.

Shares in Thai airlines fell after the FAA said Thailand had failed to tackle shortcomings found in an audit this year in commercial aviation standards.

The lower safety rating blocks the airlines from launching or expanding in the United States and may tarnish the image of the country’s thriving tourist sector.

“I have ordered them to resolve the issue,” Prayuth told reporters, referring to industry officials.

The FAA cut Thailand’s Department of Civil Aviation (DCA) to category two from one for failing to comply with FAA standards. It did not give details of the failures but said the rating meant the DCA was ‘deficient in one

or more areas, such as technical expertise, trained personnel, record-keeping or inspection procedures’.

The DCA will boost its workforce as part of measures to raise performance and match international standards, the transport ministry said in a statement.

Thailand would complete a recertification process for 28 airlines flying international routes by August, which would help improve its standing in future audits, Transport Minister Arkhom Termpittayapaisith said.

No Thai airline flies directly to the US so lower rating will have little immediate impact on operations. “The financial impact of the FAA downgrade is small,” Deputy Prime Minister Somkid Jatusripitak said. “But there is an impact in terms of sentiment.”

The benchmark SET index slipped to a two-month low as airlines declined. Shares of national carrier Thai Airways International dropped 6.3 per cent to a six-year low. Shares of Asia Aviation Pcl, a major shareholder in budget carrier Thai AirAsia, and Bangkok Airways dropped more than three per cent each.

South Korea, Japan and China had previously stopped Thai-based airlines from flying charters and new routes over safety worries raised in another international audit. Those restrictions have since been relaxed.