TAA predicts full recovery in 2 years
Thai AirAsia (TAA) predicts full recovery for Thai tourism in the next two years as international borders will gradually be opened by next year, while passenger traffic has yet to resume despite the country's reopening on Nov 1.
Santisuk Klongchaiya, chief executive of TAA, said passenger demand has started to come back in November with TAA flying 40% of its full fleet capacity of 60 airplanes, but it expected moderate growth as people are still cautious about spending.
He said the load factor this year should reach 70-80%. However, the total number of passengers is expected at 3 million, a nosedive from the forecast made earlier this year at 9 million as the airline was left with just a few months of operating services after facing the third Covid wave in April, followed by a rigid lockdown from July 12-Sept 2, resulting in just 1.8 million passengers in the past nine months.
Next year it will downsize the fleet to 54 jets as the leasing contracts for six of them will expire and the airline has no plan to replace them as demand is unlikely to grow dramatically next year.
"The key for international air traffic is both sides reopening as we could see from this month that the growth of inbound market to Thailand remains slow. That's because many countries, particularly in Asia, still haven't fully reopened," said Mr Santisuk.
He said national reopening policies have affected the aviation business, making TAA consider only international routes that don't impose mandatory quarantine or travel restrictions.
"After almost two years, we will resume the first international flight to the Maldives on Dec 22 as the country requires no quarantine and visa. The airline from now on will have to seek only international destinations that have the same entry basis as the Maldives to guarantee consistent demand from both sides, such as Cambodia which could be the next destination for us," he said.
Mr Santisuk said TAA hopes to carry 13.5 million passengers in 2022 when international borders gradually reopen and the airline can utilise 100% of total capacity, before seeing a full recovery in 2023.
Besides border controls, the aviation industry also has to combat surging fuel prices which account for 30-40% of total operational costs. The rising costs will affect air ticket prices and passenger demand, respectively.
He said TAA should have liquidity to run the business for the whole of next year, if the shareholders meeting on Nov 26 approves the restructuring and capital-raising plans which will see additional injections of 14 billion baht in December 2021 and January 2022, with allocations of 11 billion baht and 3 billion baht, respectively.