Thai AirAsia cuts 2020 passenger target by 51%
Low-cost carrier Thai AirAsia (TAA) has cut its passenger target for 2020 to 11 million, down by 51 per cent on last year, while aiming to fill 80 per cent of seats, down from 85 per cent.
TAA said it will closely monitor the situation, especially in the latter half of the year when travel restrictions to curb Covid-19 are likely to ease and regional travel is expected to return.
The company said it stands ready to serve the Chinese market, which is expected to recover soon. Thailand remains the number one destination for Chinese travellers.
Meanwhile, TTA major shareholder Asia Aviation Plc (AAV) today (May 13) announced its operating results for the first quarter of 2020 that showed total revenue of Bt9.399 billion, down 19 per cent year on year, with a net loss of Bt671 million.
TAA carried a total of 4.5 million passengers during the period, down 23 per cent YoY with a load factor of 84 per cent, amid travel restrictions in light of the Covid-19 crisis.
The airline has adjusted its network and capacity to match travel demand, reducing flight frequencies and cancelling routes to at-risk countries. The adjustments saw its available seat kilometres (ASK) fall by 30 per cent from last year to 4.834 billion.
Santisuk Klongchaiya, CEO of Asia Aviation and Thai AirAsia, said the entire service industry, including AirAsia, had faced impacts from the Covid-19 outbreak during the latter end of the first quarter, which had depressed travel demand and prompted many countries to impose travel restrictions.
To comply with instructions from the Civil Aviation Authority of Thailand (CAAT), TAA suspended its international flights between March 22 and May 31 while domestic flights were suspended between April 1 and 30.
TAA resumed operations on major domestic routes on May 1 on the back of regulatory easing measures and an improved Covid-19 situation in Thailand.
The partial resumption, under strict CAAT health standards and oversight, was for necessary travel, including for business, work and passengers returning home, rather than for tourism. International flights are expected to resume in the near future once border restrictions are lifted.
Meanwhile, the company has adjusted its business plans to adapt to the current changing situation, especially in terms of managing and containing costs. TAA said top executives and senior employees have taken voluntary salary cuts, while reserve capital is being sought through soft loans requested from the government, which are currently being reviewed.
The company is also revisiting and reviewing its future investment plans, with all significant capital expenditures suspended or delayed. New aircraft acquisitions may be suspended this year to maintain a fleet appropriate to circumstances.
“We are working hard to manage our capital in spite of this crisis, but we are not stagnating. We are using this opportunity to improve our passenger service, especially in terms of security and hygiene, and introducing innovations to reduce physical contact. Innovative revenue sources are also being created, like AirAsia Delivery, a home delivery service for our most popular Santan menu items. These are opportunities we have identified in this crisis and we are confident that we will emerge from the situation stronger than before,” Santisuk said.
