City Airways, a small debt-ridden airline facing a ban by the Civil Aviation Authority of Thailand (CAAT), will petition the Administrative Court today to issue an injunction against the Thai regulator's order allowing it to only fly until Friday, its president said.
Airline president Sutrissaya Vuthimedhi told the Bangkok Post the CAAT's decision to ground its E8-326 Bangkok-Hong Kong flight on Saturday meant the airline had to pay for food, accommodation and other compensation for stranded passengers as well as risking lost ticket sales to future customers.
"The claims over safety standards to cancel our operating permit were groundless, and did not take into consideration the damage to the company and trouble the stranded passengers have endured," Ms Sutrissaya wrote in an email.
CAAT chief Chula Sukmanop said on Sunday his agency found City Airways unsafe to fly and ordered the 8am 737-400 flight grounded until the problems were rectified. The cancelled flight left 160 Chinese passengers stranded.
Mr Chula said the Hong Kong aviation authority also raised a red flag over the airline's airworthiness in five areas. Two of the faults had to do with a co-pilot working without taking the mandated minimum break and the airline employing some untrained flight attendants.
The airline challenged those accusations and appealed for leniency, saying its debt to a leasing firm of US$1 million (36 million baht) could not be used as a reason to cancel its operating permit. Twelve hours later, the airline was given a temporary permit to fly the Bangkok-Hong Kong route until Friday due to its passenger backlog.
Today, the airline will ask the court to reinstate the air operator certificate (AOC) for its leased Boeing 737-800 aircraft, revoked by the CAAT on Feb 5, and issue an operating permit for the airline, said Ms Sutrissaya, who is also a board member.
Founded in 2011 with a current paid-up capital of 220 million baht, City Airways was originally owned by a group of Thai, Chinese and Hong Kong tour firms. A corporate shake-up with a new shareholding structure took place a year ago.
Ms Sutrissaya and her management team had drastically reduced the airline's debt of 310 million baht in 2013 to 40 million baht last August, but debt has risen to 230 million baht now due to regulatory issues.
In its latest financial statements to the Department of Business Development, the airline posted a net loss of 145 million baht in 2013, nearly five times more than in 2012.