AAV posts 2.33bn-baht Q2 loss, cuts Q3 capacity 20%
Thai AirAsia will cut Q3 seat capacity by about 20% after surging fuel costs pushed parent AAV to a 2.33-billion-baht Q2 net loss
- AAV reported a 2.33 billion baht net loss for the second quarter, a reversal from a profit in the same period last year, primarily driven by a 43% surge in fuel costs and a weaker baht.
- The loss occurred despite the airline raising its average fare by 27%, a measure that only covered about half of the additional fuel burden.
- In response to high operating costs, Thai AirAsia plans to cut its seat capacity by approximately 20% year-on-year in the third quarter, mainly on selected international routes.
Asia Aviation Public Company Limited (AAV) reported a net loss of 2.326 billion baht in the second quarter of 2026 as sharply higher aviation fuel costs and a weaker baht outweighed higher fares and cost-cutting measures at Thai AirAsia.
The result reversed a net profit of 214.2 million baht in the same period last year. The quarterly loss included a foreign-exchange loss of 293 million baht, while the core operating loss stood at 2.091 billion baht.
Sales and service revenue increased 2% year on year to 10.046 billion baht, including 8.575 billion baht from ticket sales, up 6%.
Thai AirAsia raised its average fare by 27% to 2,127 baht as it sought to pass on part of the higher fuel bill. The increase, however, covered only about half of the additional fuel burden.
Fuel bill climbs 43%
The average fuel price cited by AAV rose 124% to US$182.5 per barrel, or about 5,900 baht, pushing quarterly fuel costs up 43% to 5.011 billion baht.
EBITDA fell 96% to just 25 million baht.
The carrier responded by reducing second-quarter seat capacity by 13% to 5.14 million seats and concentrating on core markets.
Passenger numbers fell 16% to 4.03 million, with an average load factor of 78%.
Thai AirAsia nevertheless retained a 37% share of Thailand’s domestic aviation market and maintained an 80% domestic load factor.
Operational performance improved, with on-time performance rising to 88% from 66% in the previous quarter.
Non-fuel costs cut but unit costs rise
Thai AirAsia reduced selling and administrative expenses by 17% and employee costs by 12%.
Total costs excluding fuel fell 8%, although cost per available seat kilometre excluding fuel, or CASK ex-fuel, increased 13% to 1.43 baht as capacity was reduced.
For the first half of 2026, AAV recorded total revenue of 24.425 billion baht, down 2% from 24.904 billion baht a year earlier.
Total expenses rose 11% to 24.209 billion baht, leaving AAV with a first-half net loss of 1.485 billion baht, compared with a net profit of 1.602 billion baht in the corresponding period of 2025.
First-half EBITDA declined 6% to 3.759 billion baht, while the core operating loss for the six-month period stood at 440 million baht.
Third-quarter capacity to fall about 20%
Thai AirAsia plans to cut seat capacity by around 20% year on year in the third quarter as it adjusts its network to elevated fuel costs and the regional low season.
Reductions will focus mainly on selected international services, particularly routes involving India, China and Hong Kong, as well as fifth-freedom services.
The airline had already reduced frequencies and temporarily suspended routes earlier in the year as jet-fuel costs surged.
Thai AirAsia will continue adjusting fares to reflect costs while seeking to keep its load factor above 80%.
The airline also plans to manage its exposure to fuel prices at US$89 per barrel for 13% of its expected third-quarter fuel requirement.
Phairat Pornpathananangoon, chief executive officer of AAV and Thai AirAsia, said the airline had prioritised liquidity and profitability on routes with stronger potential as the global fuel-price crisis intensified.
He said the higher average fare was intended to recover part of the increase in actual operating costs while preserving an 80% domestic load factor.
Capacity set to return for peak season
Thai AirAsia plans to increase aircraft utilisation to 52 aircraft in the fourth quarter to capture year-end holiday demand.
The airline expects to return to operations at both Bangkok airports — Don Mueang and Suvarnabhumi — while restoring international services from Don Mueang that had been temporarily suspended.
The carrier expects to benefit from government tourism-promotion measures and international events during the peak travel season and is targeting a return to profitability in the final quarter.
To strengthen liquidity, AAV raised 3.815 billion baht through a new bond issue in June.
Its ratio of net interest-bearing debt to equity stood at 1.1 times.
The company is also considering sale-and-leaseback transactions involving aircraft to provide additional liquidity and financial flexibility while fuel prices remain elevated.
Net-zero programme continues
Thai AirAsia is continuing its longer-term target of achieving net-zero greenhouse-gas emissions by 2050.
Passengers can voluntarily offset either 50% or 100% of emissions from their flights through the carbon-offset feature on the AirAsia MOVE application, with proceeds directed to certified carbon-reduction projects.
The airline is also participating in the “Aviation Thailand towards Net Zero 2050” programme.
Under its cooperation with the Tourism Authority of Thailand, Thai AirAsia has expanded its Journey D community-tourism initiative through the “Village to the World Season 5” campaign to Khlong Hoi Khong and Singhanakhon districts in Songkhla.
