Thai AirAsia posts Q1 net loss as COVID-19 pandemic continues to depress tourism

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https://www.bigmarker.com/series/ebace-connect/series_summit?utm_bmcr_source=MediaAsia Aviation (AAV), the major shareholder of Thai AirAsia (TAA), said it posted a net loss in the first quarter of 2021 of 1.86 billion baht (US$59 million) on total revenue of 1.35 billion baht compared to a net loss of 671 million baht in the same period last year (absorbing the COVID-19 impact for the full quarter this year, which was different from last year when the impact hit only at the end of the quarter). During the quarter the airline recorded a load factor of 66 percent. AAV said it planned to taised at least 6.8 billion baht as part of a restructuring plan to keep the airline going until the COVID-19 situation has recovered.

CEO of Asia Aviation and Thai AirAsia, Santisuk Klongchaiya, said the first quarter of 2021 was impacted by a second wave of the COVID-19 pandemic and said the airline and AAV “have reviewed every aspect of the operations and have taken appropriate courses of action, including strict cost management, cooperation between executives and employees to voluntarily take leave without pay and furlough schemes, flight management processes and have also sought out new business opportunities, leveraging the group’s digital transformation where it makes commercial viable sense”.

During Q1 2021 Thai AirAsia operated 42 percent of the first quarter of 2020 domestic capacity while international flight services were not yet resumed. TAA optimised fleet utilisation by reducing the number of aircraft in operation to a total of 61 aircraft at the end of the quarter.

“Our most critical plan to  overcome the negative effects of COVID-19 is securing the capital for sustainable growth in the future.  We recently announced  a restructuring plan last month. This plan will secure up to 6.825 billion baht for TAA to support its liquidity and business operation. The funds are to be secured from new investors and existing investors by TAA being listed on the Stock Exchange of Thailand, instead of AAV.  All these decisions were made with due diligence and consideration to uphold the utmost benefits for our stakeholders,” Santisuk said. “In view of the latest third wave that has materially impacted our business since middle of April 2021, denting the full resumption of domestic routes that TAA successfully managed to see at the end of March, we have taken further steps to reduce the cash burn from our operations including active capacity management, and the deferment of loan repayment and lease payments. With the aforementioned plans and supportive factors, we believe that we will return stronger than ever when the opportunity presents itself. We will continue to be ready to compete with our great value airfares  and will maintain our dominant market leadership.”

The company also said the third wave of COVID-19, which began in April 2021 in Thailand, would impact Thai AirAsia’s second quarter of 2021. “These infections are more severe than  the previous waves and affect tourism recovery in Thailand, leading to lower travelling demands,” Thai AirAsia said. The airline said it would “rationalise capacity” and its network “to maximise profitability and maintain passenger load factors”.

Thai AirAsia expects that international flights will resume in the fourth quarter of  2021 and ramp up to full capacity in the first quarter of 2022. “Thai AirAsia plans to fuel revenues from charter cargo flights and explore new initiatives for non-airline business such as selling hotel rooms, fresh food, and e-commerce.”

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