Fuel costs hammer AirAsia profits

Corporate August 10, 2018 14:29

By The Nation

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Asia Aviation Plc (AAV), a major shareholder of Thai AirAsia Co Ltd, has reported its operational results for the first half of 2018 with a total revenue of Bt20.89 billion and a net profit of Bt698 million, which dropped by 6 per cent compared with the same period last year, due to heightened fuel costs.

Nonetheless, the company has a load factor of 88 per cent, on par with the same period last year, with 10.95 million passengers served, up 15 per cent and with a fleet of 59 aircraft. 

Chief executive officer Santisuk Klongchaiya said that in the second quarter, AAV achieved total revenues of Bt9.3 billion and a net loss of Bt 306 million while TAA saw a total revenue of Bt9.3 billion and a net loss of Bt567.5 million. 

The losses have been attributed to heightened fuel costs, which rose 37 per cent from last year. However, operational statistics were still in a satisfactory range with the load factor at 85 per cent on 5.31 million passengers served, up 13 per cent year-on-year.  

TAA did not acquire any new aircraft this quarter, keeping its fleet at 59 aircraft but still increasing flight frequency on four routes departing from Bangkok Don Mueang and one from Chiang Mai.

“Higher fuel costs have been a challenge with fuel being a major operating cost for any airline. We still believe we will adapt and see satisfactory results in the latter half of the year.  

“We have been able to maintain our leading domestic market share at 33 per cent and continue to seek new opportunities for both our domestic and international networks.  

“During the first half of the year, we introduced seven routes from Bangkok Don Mueang to Ranong, Johor Bahru, Chengdu and Chumphon; from Phuket to Macau and Kunming; as well as from Chiang Mai to Udon Thani, in order to maintain our strategic advantage moving forward,” Santisuk said.

In the latter half of 2018, Santisuk said he expected TAA will be able to compensate for higher fuel prices and continue towards growth targets.  

TAA is now looking for opportunities out of Bangkok and is to station more aircraft in Chiang Mai in preparation for added direct international flights such as those recently introduced to Yangon, Taipei and Hanoi.  

TAA is also pushing a policy of sustainable development, which it sees as essential to longevity and the benefits of its stakeholders.

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