Asia Aviation Public Company Limited (SET: AAV) reported a challenging second quarter for 2026 as a massive spike in energy prices erased top-line gains.
The company posted a net loss of THB 2,326 million for 2Q26, a sharp reversal from the THB 214.2 million profit recorded in the same period last year. Revenue from sales and services grew a modest 2% year-on-year to THB 10,045.5 million, though total consolidated revenue fell 9% to THB 10,368.4 million, largely due to high unrealized foreign exchange gains in the previous year.
Key Financial Highlights:
- Net Loss: THB 2,326 million.
- Average Fare: THB 2,127 (up 27% YoY).
- EBITDA Margin: Collapsed to 0.2% from 6.0% in 2Q25.
- Loss Per Share: THB 0.18.
Operating through its subsidiary Thai AirAsia (TAA), the group executed an agile “capacity rationalization” program, cutting total seat capacity by 13%. While passenger volume fell 16% to 4.03 million guests, the strategy successfully prioritized higher-margin tickets.
- Domestic: Despite a 15% drop in passengers, active yield management drove average domestic fares up 28% to THB 1,636, maintaining a healthy 80% load factor.
- International: Capacity was slashed by 19% as the airline exited low-profit routes. This resulted in a stable 76% load factor and a significant 28% surge in average international fares to THB 3,279.
The quarter’s underperformance was almost entirely driven by an unprecedented 124% year-on-year surge in jet fuel prices, which reached $182.50 per barrel. This spike pushed total fuel expenses to THB 5,010.6 million—equivalent to 50% of the company’s service revenue. Profitability was further eroded by a THB 293.1 million non-cash foreign exchange loss stemming from the depreciation of the Thai baht.
AAV bolstered its capital position with a THB 3,815.3 million debenture issuance in June 2026, though cash and equivalents ended the period down 21% at THB 2,885.1 million. Management expects a neutral sentiment in the upcoming third quarter due to seasonal weakness but remains optimistic for the year-end. Recovery efforts will be supported by government tourism stimulus campaigns launching in September and a planned fleet expansion to 52 operating aircraft for the festive Q4 demand.
