SINGAPORE – Low-cost airlines that brought a new type of connectivity to Southeast Asia in the years leading up to COVID-19 are becoming some hope now that the strictest pandemic restrictions are being removed, but they are still concerned about their post-pandemic. Survival.
On Tuesday, Malaysia-based AirAsia reported a loss of 992 million ringgit ($237 million) for the quarter from April to June, falling in red numbers after a 17 million ringgit profit the previous year. This represents the biggest loss for the airline since the board in 2004.
With Malaysia and other countries more commonly stranded in the quarter, the total number of passengers transported through AirAsia fell 98% compared to last year. In addition, its occupancy ratio fell from 85% to 59%.
Quarterly collapsed 96% “at the height of the COVID-19 pandemic,” the airline said in an exchange file, adding that 42% of flights arrived here for cargo and logistics operations.
Earlier this month, Philippine airline Cebu Air, known as Cebu Pacific, reported a net loss of 7.95 billion pesos ($160 million) at the time of the quarter, in red after a net profit of 3.78 billion pesos a year earlier.
The effects of airlines occur as the airline industry begins to emerge from the worst restrictions and blockades in the region, leaving cheap airlines wondering how they would do in the next phase of recovery.
The budget economic model, born in the West, allowed Southeast Asian airlines to aggressively create new routes in a region populated by 650 million people, many of whom began to succeed in middle-sized elegance just as reasonably priced airlines began promising reasonable vacations. .
The new airlines also captured consumers who used to do so via long-haul buses and ferries.
AirAsia has been an industry leader in Southeast Asia, winning competitions such as Cebu Air, Singapore Airlines subsidiary Scoot, Lion Air in Indonesia, Nok Airlines in Thailand and Vietjet in Vietnam. Many of these airlines have targeted short-distance domestic markets while exploring foreign routes.
Before the pandemic, the fierce festival had already wreaked havoc on industry balance sheets, and the coronavirus dealt the final blow to some players. NokScoot, a joint venture between Bangkok-based Nok Airlines and Scoot, announced its liquidation in June. Last month, Nok Airlines itself announced that she would go through a court-supervised pardon. Many cheap airlines have taken significant cost-cutting measures, adding layoffs.
Now that countries are gradually lifting restrictions, low-budget airlines are starting to resume their flights. Cebu Air took off in early June. AirAsia said it would order more in June than in May and transported 3 times the number of passengers in Malaysia.
AirAsia announced on Monday a partnership with the Agoda booking site to collaborate on packages and joint product marketing.
On the same day, Scoot stated that he had begun modifying passenger ships to create a source of income of choice. All the seats of one of your aircraft have already been disposed of to allow the shipment to be transported in the cabin. The measure allowed the aircraft to carry twice as many goods as before.
Another plane is expected to be replaced this week.
But customers for the recovery of low-cost airlines are mixed. On a positive note, industry analysts say they would possibly be well positioned in the recovery phase, compared to full-service operators, as they are more targeted at domestic markets. In addition, price-sensitive travelers will prefer cheap airlines in the context of an ongoing economic downturn.
However, keeping the style cheap is probably a major challenge. The style is based on optimizing and maximizing the use of the aircraft: full seats and aircraft in the air. But in the recovery phase, several aircraft will remain on the ground and cabin cleaning procedures will allow aircraft to fly on the runway longer.
Moreover, for budget brochures that are most exposed to foreign exposure, a major fear is “whether the domestic application can fully compensate for the decline in foreign markets,” said an analyst at a primary brokerage firm that did not wish to be included in the Nikkei Asian Magazine. “If the existing scenario continues, in fact [more] actors will come out, because none of them have enough reserve of money for the next six months without a capital call.”
In terms of liquidity, AirAsia has implemented bank loans in countries where it operates to generate working capital and bill for the planes it leases, according to Malaysian investment bank Kenanga. Analyst Raymond Choo noted in a recent report that “AirAsia has ongoing deliberations that can lead to more third-party investments in express segments of the group’s business.”
Cebu Air said in a foreign exchange record that the company “relies on its ability to obtain liquidity for liquidity desires [even if it suffered] unprecedented losses due to the expected slow recovery of this crisis.” He negotiated with primary suppliers capital expenditure commitments and related money flows.
Last month, the International Air Travel Association predicted that the global air call would not return to 2019 degrees until 2024, slower than the previous projection of 2023. The number of global passengers this year is expected to fall by 55% compared to 2019, he said.
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