Thai AirAsia sees losses fall by 80%

20 August 2009

The no-frills carrier Thai AirAsia saw its losses narrow by 81.84% in the second quarter to 81 million baht from 446 million in the same period last year.

The airline, part of Asia's largest low-cost carrier, attributed the second-quarter loss to the impact of Bangkok's April riots and the H1N1 outbreak which sharply reduced air travel demand.

Without those negative factors, Thai AirAsia should have turned a profit in the April-June period, the airline's chief executive Tassapon Bijleveld told the Bangkok Post yesterday.

Tony Fernandes, chief executive of AirAsia Group, said in a statement that Thai AirAsia had performed well by containing losses, despite weakened consumer sentiment caused by the domestic political situation and the second quarter being a seasonally weak period for Thailand.

Thai AirAsia - 51% Thai-owned with 49% held by Malaysia-listed AirAsia Bhd - saw its second-quarter revenue slip by 2% year-on-year to 2.02 billion baht, due partly to the 15% decline in the average fare.

The airline carried 10% more passengers in the second quarter with a 69% load factor. As of June, it operated a 17-strong fleet.

Thai AirAsia made a net profit of 217 million baht in the first quarter, and after subtracting the second-quarter loss, the airline still made a 136-million-baht profit in the first half of the year, said Mr Tassapon.

He said he remained upbeat about the the airline's operations this year.

"We will definitely make a profit, in the range of 800 million baht to one billion baht, for the whole of 2009," said Mr Tassapon.

That would be a major turnaround from last year when Thai AirAsia recorded massive losses, largely due to the spike in oil prices, which caused most airlines around the world to post huge losses.

Mr Fernandes echoed the view, saying the outlook for Thai AirAsia is positive with satisfactory passenger growth expected. The airline has also captured a significant market share while competitors are scaling back capacities and cancelling flights, he said.

The Thai operation is also enjoying the cost benefits of using the more fuel-efficient Airbus A320 aircraft. It recently increased the number in its fleet to nine.

AirAsia as a group posted sharply higher earnings in the second quarter as dwindling demand for full-service carriers amid the economic downturn boosted budget airlines.

The group made a net profit of 139.2 million ringgit (1.33 billion baht) in the April-June quarter against 9.4 million ringgit a year earlier.

The airline recorded a seat load factor at 75% during the quarter, a five-percentage-point increase over its first quarter performance.