Kiatnakin Phatra Securities (KKPS) has initiated coverage of Asia Aviation Public Company Limited (SET: AAV), citing robust prospects as Chinese tourism rebounds and travel demand climbs in 2026. The firm assigns a ‘Buy’ rating with a target price of THB 1.70 per share, supported by a 2026 target price-to-earnings (P/E) ratio of 11.5x.
AAV, which operates Thai AirAsia—the country’s leading low-cost carrier—trades at an attractive 2026 P/E of just 9x, notably below the regional average of 12x. The valuation remains compelling, with current share prices still lagging levels seen during the height of the Covid-19 pandemic (an average of THB 1.7 in 2020 and THB 2.5 in 2021, and a rights offering/private placement at THB 1.75 in late 2021).
While risks such as tourism shocks, fuel price volatility, and heightened airline competition remain, KKPS believes the risk/reward is clearly tilted in favor of upside potential, especially with the expected resurgence of Chinese tourists.
AAV controls 40% of Thailand’s domestic route market and holds a 9% share of Thailand’s international routes, second only to Thai Airways (SET: THAI). KKPS projects a key turnaround in the final quarter of 2025, expecting a core profit recovery at THB 1.1 billion, versus the losses totaling THB 0.8–1.2 billion in the second and third quarters of the same year. This recovery is expected to be driven by robust domestic passenger growth.
Momentum is set to accelerate in the first quarter of 2026 with a forecasted rebound of inbound Chinese tourists, likely boosting the overall industry cabin factor on China routes from 60–70% to about 80% by February 2026. Although AAV temporarily decreased its seat capacity on China routes—from 13% of total seats in 2019 to just 5% in the first nine months of 2025—the carrier’s available aircraft fleet provides ample flexibility to quickly scale up flights in response to strong demand.
Further international expansion is on the cards, especially into India, where AAV increased capacity by 24% year-on-year in the first nine months of 2025. The airline has also implemented the ‘fifth-freedom’ model to open new traffic flows through Taiwan and Hong Kong, connecting Thailand and Japan—a strategy likely to broaden its network reach further.
Domestically, AAV is boosting presence at Suvarnabhumi Airport and Don Mueang, with higher inbound tourism supporting both international and domestic demand (foreign visitors comprising roughly 20% of domestic traffic).
Looking ahead, KKPS forecasts that AAV’s core profit could surge 4.5 times to reach THB 1.9 billion in 2026, up strongly from THB 0.4 billion expected in 2025. However, this figure still lags the pre-pandemic high of THB 3.0 billion recorded in 2024.
