AAV Announces Operational Results for the Second Quarter 2021 with Continued Impact from COVID-19

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Asia Aviation Plc. (“AAV”), major shareholder of Thai AirAsia Co. Ltd. (“TAA”), announces its operating results for the second quarter of 2021(“Q2/2021”), posting a total revenue of Baht 1,081 million, with a net loss of Baht 1,692 million, primarily due to the ongoing  spread of the Coronavirus (“COVID-19”) and its effects on the tourism and aviation industries. Meanwhile, in this quarter, TAA recorded a total of 721,794 passengers, up 155 percent from the same period last year, on the back of increased travel demand during Songkran festival and the flight hibernation in the same period last year. Consequently, the load factor was 61 percent, up from 52 percent last year.

CEO of Asia Aviation Plc. and Thai AirAsia Co. Ltd., Santisuk Klongchaiya, acknowledged that AAV’s second quarter results still remained subdued due to external factors such as a more severe domestic COVID-19 outbreak than expected. He pointed out that AAV and TAA have reviewed every aspect of the operations and have taken appropriate courses of action, including strict cost management and have also sought out new sources of funds. This includes a corporate and capital restructuring plan and a request for soft loans to maintain employment from the government, which have yet to be concluded.

“A new wave of COVID-19 infections erupted in April 2021, with new variants also emerging.  This clearly impacted our operations in May and June and obligated our airline to scale back the number and frequency of flights to ensure proper liquidity and to secure both short-term and long-term performance” Mr. Santisuk said.

For Q2/2021, AAV reported a total revenue of Baht 1,081 million, with a net loss of Baht 1,692 million, compared to net loss of Baht 1,141 million in the same period last year. Sale and service revenues increased Year-on-Year (“YoY”), due to a low base from the fleet hibernation in April 2020. Freight increased by 682% YoY on the back of 132 cargo flights in 2Q/2021. Meanwhile, the operating costs declined by 20% YoY mainly from reduction in staff cost.

For the first half of 2021 (“1H2021”), AAV posted a total revenue of Baht 2,431 million, with a net loss of Baht 3,556 million. Due to COVID-19 which caused suspension on all international routes, total revenues decreased by 75% YoY from a 65% drop in passengers and a 26% drop in average fare. Operating costs also dropped by 49% YoY in part from employees’ pay cuts and furlough and related expenses due to fewer flights compared to the previous year.

Looking to the latter half of 2021, the company received positive signals at the beginning of July, when Thailand started reopening the country to foreign travellers with the Phuket Sandbox project, which allowed TAA to increase flight frequencies to and from Phuket. However, Thailand was hit by the intensifying COVID-19 situation again and the national vaccination rollout was slower than expected. Furthermore, the Civil Aviation Authority of Thailand (“CAAT”) issued an announcement prohibiting airlines from flying passengers in/out of the maximum control zone. Thereby, TAA announced the temporary suspension of all scheduled domestic flight operations from July to August. Simultaneously, TAA recalibrated plans to focus on its E-Commerce and Cargo businesses, which are seeing notable growth.

Mr. Santisuk explained that AirAsia Group’s acquisition of Gojek (Thailand) and introduction of the airasia Super App are affirmations that the company will no longer be only an airline and will provide products and services in response to all lifestyles. He stated the group is building a business ecosystem conducive to diversification of the already strong AirAsia brand, adding it will be fully developing its cargo capabilities, foreseeing satisfactory returns from the business in the future.

“The most important task for the latter half of the year will be maintaining fiscal discipline and supporting liquidity.  We will continually be assessing risk but we believe that our short-term policies will soften the blow of external factors. Acknowledging that there is no replacement for travel, we can only encourage everyone at this time to take care of themselves and assure that when the opportunity returns, and demand for travel begins to rise, Thai AirAsia will be ready to return to robust growth” Mr. Santisuk remarked.