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Thai AirAsia posts first quarter loss, cuts passenger forecast
May 15th 2020
Thai AirAsia has cut its passenger forecast for calendar 2020 by 50% in response to the coronavirus pandemic after it posted a net loss for its first fiscal quarter. Read More »
The LCC fell into the red in the three months to March 31, 2020, reporting a net loss of 1.2 billion baht (US$38.1 million) compared with a net profit of 903 million baht in the prior corresponding period.
Revenue declined 19%, to 9.4 billion baht, Thai AirAsia's financial results published this week showed.
Thai AirAsia suspended all international flights on March 22, in line with government restrictions, with flights not due to resume until June. Similarly, domestic flights were suspended for April before resuming at the start of May for necessary travel, including for business, work and passengers returning home, rather than for tourism, the LCC said.
The airline has adjusted its business plan to adapt to market conditions, with a focus on managing and containing costs.
Measures included restructuring some fuel hedges, executive salary sacrificing and a request for government support to boost its capital reserves.
Thai AirAsia said in a statement it was reviewing its investment plans with all significant capital expenditures to be suspended or delayed.
"New aircraft acquisitions may be suspended this year to maintain a fleet appropriate to the current circumstances," Thai AirAsia said.
Thai AirAsia has reduced its target for passengers carried to 10.8 million for 2020, a 51% reduction from the 22.1 million passengers the LCC flew in 2019.
Capacity, measured by available seat kilometres (ASK), would be cut by 56%. The load factor target was down five percentage points to 80%. Aircraft utilisation also will be lower given the lack of international sectors.
There was some hope the Chinese market would be quick to rebound once travel restrictions eased.
"With the Chinese market expected to recover in the near future and given Thailand remains the number one destination for Chinese travellers, the company will ensure it is ready to seize this [opportunity] as soon as possible," Thai AirAsia said.
Thai AirAsia CEO, Santisuk Klongchaiya, said: “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 security and hygiene, and introducing innovations to reduce physical contact."
"Innovative revenue sources are being created like AirAsia Delivery, a home delivery service for our most popular Santan menu items. These are the opportunities we have identified in this crisis and we are confident we will emerge from the situation stronger than before."
