AirAsia increasingly optimistic about Q4 domestic traffic recovery

Traffic momentum stalled in the second quarter because of  COVID-19, but AirAsia sees its markets coming back by the fourth quarter.

AirAsia Group predicted there will be a gradual increase in domestic operations for its carriers in the fourth quarter as COVID-19 vaccination rates rise and travel restrictions start to ease in key Southeast Asian markets.

The group’s units in Malaysia, Indonesia and Thailand saw domestic recovery momentum stall in the second quarter thanks to rising COVID-19 infections in these markets, AirAsia said. But it is optimistic about the near-term outlook. Accelerating vaccine rollouts should lead to more travel lanes and travel bubbles for vaccinated passengers, Bo Lingam, the group’s president for airlines, said.

Lingam highlighted one such initiative in Malaysia, where the government has announced a domestic travel bubble enabling vaccinated travelers to visit the leisure market of Langkawi (LGK). This is set to begin in mid-September, and it could lead to the formation of other domestic travel bubbles in Malaysia. 

There has also been recent progress in Thailand. AirAsia Thailand was able to resume 11 domestic routes in early September after local travel restrictions were eased.

AirAsia has discussions underway to raise more new capital for its airlines and other business units, Group CEO Tony Fernandes said. It is also evaluating further funding and monetization opportunities. “Through all of our strategic fundraising exercises, we expect to have sufficient liquidity for [the second half of] 2021 and throughout 2022,” Fernandes said.

For the second quarter, the AirAsia Group reported a net loss of RM720 million ($173 million). 

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