Thai Air Asia posts huge Q2 loss as their fleet struggles back into the skies

Despite many of Thailand’s discount airlines taking to the skies again, all airlines are still in the financial doldrums as they battle travel restrictions, a risk-averse flying public and closed international borders. Now Asia Aviation, major shareholder of Thai AirAsia, has announced revenue of 2,221 million baht and a net losses of 1,210.6 million baht for Q2 2020.

The net loss was predominantly due to the travel restrictions at the time, causing a massive decline in demand and the temporary grounding of its fleet due to the travel bans. TAA’s CEO Santisuk Klongchaiya says the group struggled to maintain minimal operations during the 2nd quarter, especially on international routes.

“Total revenue for the quarter decreased by 78% mainly due to the reduction in passengers carried, which was reduced by 95% year-on-year, to 283,601 passengers.”

During Q2 international passenger traffic plunged by almost 100% compared to the same period last year, while the overall load factor in the same quarter declined to 52%.

“Total expenses decreased by 63% 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.”

“With the situation improving and domestic flights gradually resuming in May, we were able to offer sale promotions such as the Unlimited Pass, to stimulate air travel in the latter half of the year.”

The Unlimited Pass offered 100,000 travellers fares costing only 100 baht each if they purchased a 3,000 “passport” which would run until the end of 2020.

The Thai franchise of Malaysia’s Air Asia parent is still focussing on domestic routes and working with the government economic stimulus package as well as introducing new routes such as Chiang Mai-Hua Hin and Udon Thani-Hua Hin and the possibilities of flying into Bangkok’s Suvarnabhumi International Airport along with its base at Don Mueang International Airport.

Thai Air Asia hope to resume international flight operations through travel bubble schemes with certain target markets, primarily China and other countries that have effectively contained the outbreak. At this stage the Thai Government have shelved travel bubble plans as some of the previous low-risk countries have again flared up with new outbreaks.

The group are also hoping that they will be able to re-introduce inflight services later this month and food and beverage services soon as well. Up to date all domestic flights have been a peaceful experience without any interruptions for inflight services, a major cash cow for discount airlines.