Pi Securities anticipates that Asia Aviation Public Company Limited (SET: AAV) will record a net loss of THB 2,284 million for the second quarter of 2026. The outlook is expected to be significantly impacted by a more than 100% increase in fuel prices.
Excluding estimated foreign exchange losses of approximately THB 200 million, the underlying loss would be THB 2,084 million. This figure reflects a substantial increase from the loss of THB 699 million in 2Q25 and marks a reversal from a normalized profit of THB 1,381 million reported in 1Q26.
Total revenue for 2Q26 is expected to reach THB 10,265 million, representing a year-on-year increase of 5% but a quarter-on-quarter decline of 24%. The number of passengers is projected at 4.1 million, comprising 2.9 million domestic passengers (down 13% year-on-year and 32% quarter-on-quarter) and 1.2 million international passengers (down 20% year-on-year and 36% quarter-on-quarter).
The average fare is expected to rise by 28% year-on-year and 17% quarter-on-quarter to THB 2,151 per passenger per seat, reflecting fare adjustments made in response to higher fuel costs. Meanwhile, seat capacity is expected to decrease to 5.1 million seats (down 13% year-on-year and 20% quarter-on-quarter), a measure aimed at maintaining a passenger load factor of approximately 80%, compared to 81% in 2Q25 and 88% in 1Q26.
Main operating costs are projected at THB 11,808 million, an increase of 21% year-on-year and 12% quarter-on-quarter. This increase is driven by a sharp rise in jet fuel prices, which are expected to average over $160 per barrel (up 98% year-on-year and 87% quarter-on-quarter), resulting in an estimated gross loss margin of 15%. This represents a reversal from a gross profit margin of 1% in the same period last year and 22% in the previous quarter.
Selling and administrative expenses are anticipated at THB 688 million (a decrease of 19% year-on-year and 14% quarter-on-quarter), following the reduced flight activity. Overall, Pi Securities expects AAV’s operating loss for the quarter to reach THB 2,230 million.
Looking ahead to 3Q26, characterized as a low season, flight activity is not expected to decrease significantly compared to the second quarter. While jet fuel prices began to ease at the end of June, they have since increased to about $160 per barrel, although this remains below the peak observed in April. Average airfares are expected to remain at elevated levels. As a result, the net loss in 3Q26 is projected to be less severe than in 2Q26, with the company potentially returning to net profitability by 4Q26.
Pi Securities has revised its full-year assumptions regarding jet fuel prices, now expecting an average price of about $125 per barrel, compared to the earlier estimate of $135 per barrel. Accordingly, the projected net loss for 2026 has been revised to THB 2,600 million, with a return to net profit of THB 877 million anticipated in 2027.
In terms of investment recommendation, given the expectation of continued operational losses in the short term, Pi Securities maintains a ‘Hold’ rating for AAV, with a revised fair value of THB 1.10 per share (based on an estimated 2026 1.3x price-to-book value).
