Thai AirAsia flies into red as Chinese travellers decline

Thai AirAsia ended the third quarter with a loss due to a declining number of Chinese tourists and a 45% year-on-year spike in fuel prices. (Photo by Apichit Jinakul)

The drop in Chinese visitors to Thailand and higher fuel prices resulted in a loss for Thai AirAsia in the third quarter but it hopes for a better financial performance in the last three months of the year.

SET-listed Asia Aviation Plc (AAV), the operator of the budget carrier, on Friday reported a net loss of 358 million baht for the three months to Sept 30, compared with a profit of 260 million in the same period last year. For the first nine months of the year, the carrier had a net profit of 339 million baht, down from 1 billion a year earlier.

Chinese visitors have shunned Thailand -- once their favourite destination -- since the sinking of the tour boat Phoenix that killed 47 people off Phuket in July.

The government hopes to revive the confidence of the Chinese and other visitors by waiving visa-on-arrival fees for Chinese and nationals of 20 other countries for two months starting from Dec 1.

Chinese travellers topped all foreign tourist arrivals to Thailand with 9.7 million last year and more than 10 million were expected this year. For the first nine months of the year, 8.37 million tourists from China entered the country, according to the Tourism and Sports Ministry.

Visitor numbers from China to Thailand have fallen by 8.8% for the year to date, Thai AirAsia said, citing ministry figures. But the Association of Thai Travel Agents maintains the decline has been bigger since the Phuket tragedy.

Aviation fuel prices also rose 45% in the third quarter from the same period a year ago, the airline said. However, world oil prices have been plunging in the past two weeks and airlines can expect some relief in the current quarter as a result.

Thai AirAsia said its load factor stood at 81% in the third quarter with 5 million travellers on board its planes. The third quarter nomally is a low season for tourism, which peaks in the last three months and the first quarter of the year.

“The fourth quarter is crucial for tourism and we believe the situation will improve and allow us to achieve the forecast results,” said AAV chief executive officer Santikul Klongchiya.

AAV shares closed down two satang to four baht on Friday. It released its results after trading ended for the day.