Tuesday, September 29, 2020

Asia Aviation suffers big loss in Q2 from Covid-19 travel restrictions

Aug 14. 2020
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By The Nation

Asia Aviation Plc (AAV), a major shareholder of Thai AirAsia Co Ltd (TAA), on Friday reported a net loss of Bt1.210.6 billion for the second quarter, from a total revenue of Bt2.221 billion.

The loss was predominantly due to travel restrictions, causing significantly reduced demand and the temporary hibernation of its fleet in light of the Covid-19 situation.

The chief executive officer of AAV and TAA, Santisuk Klongchaiya, said: “With the tourism industry in Thailand and globally significantly impacted by the Covid-19 pandemic, resulting in subdued demand and travel restrictions, TAA managed to maintain minimal operations during the quarter, especially on international routes. Total revenue for the quarter decreased by 78 per cent, mainly due to the reduction in the number of passengers carried which fell by 95 per cent year on year, to a total of 283,601 passengers, the company said.

During the quarter, the number of international visitors carried by the company plunged by almost 100 per cent compared to the same period last year, while the overall load factor in the said quarter decreased to 52 per cent.

“Total expenses decreased by 63 per cent versus the same period last year, attributable to lower fuel costs and non-fuel expenses. Fuel costs fell as a result of capacity cuts and lower fuel prices, while non-fuel expenses decreased as a result of cost saving initiatives and eliminating all non-essential spending.

"We flew at only 8 per cent capacity compared to Q219 due to necessary flight cancellations and restrictions on air travel. With the situation alleviating and domestic flights gradually resuming in May, we were able to offer a number of sale promotions such as Unlimited Pass, to stimulate air travel in the latter half of the year," Santisuk said.

The company said it was focused on seizing opportunities where there is demand during the second half of the year, including an increase in its domestic routes along with the government economic stimulus package and the introduction of new routes such as Chiang Mai-Hua Hin and Udon Thani-Hua Hin. It would also leverage on Bangkok’s additional hub at Suvarnabhumi Airport to work in conjunction with Don Mueang International Airport.

TAA expects to resume its international flight operations through travel bubble schemes with certain target markets, primarily Indo-China, China and other countries who have effectively contained the outbreak, the company said.

TAA said it welcomed the latest move by the Office of the Civil Aviation Authority of Thailand to ease restrictions on inflight services beginning with the sale of merchandise from early August which it expects to be followed with food and beverage services soon. These would further stimulate TAA’s performance in the second half of 2020, the company said.

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