South East Asia Airlines and Covid

The pandemic has hit all airlines hard, many already had financial issues pre-COVID-19 and the pandemic has made things even worse.

In this article we look at the current situation in relation to the biggest airlines based in South East Asia.

Follow the link to jump to a specific airline. We have details for AirAsia X, Bangkok Airways, Cambodia Airways, Cambodia Angkor Air, Garuda Indonesia, Indonesia AirAsia, Indonesia AirAsiaX, Malaysia Airlines, Nok Air, Nok Scoot, Philippines AirAsia, Philippine Airlines, Scoot, Silk Air, Singapore Airlines, Thai AirAsia and Thai AirAsia X, Thai Airways, VietJet and Vietnam Airlines.

Singapore Airlines Group

Singapore Airlines Group includes Singapore Airlines, Silk Air and Scoot.

They recently announced plans to cut 4,300 people from its workforce as it looks to cope with the effects of the COVID-19 pandemic. In 2019 Singapore Airlines employed over 17,000 people, Scoot 2,400 and almost 1,400 at Silk Air

They have stated that they do not expect air travel to fully recover until 2024 at the earliest and that they will be operating at less than half capacity by March 2021.

The airline is dependant on international travel due to the size of the country and lack of domestic flights to fall back on.

Singapore Airlines plane landing. Credit Troy Mortier on Unsplash

SIA Group reported an operating loss of over s$1 billion (approx. £570 million, $735 million) for the three months ending 30th June. An increase in cargo flights has helped to prevent these losses from being greater. Passenger levels had fallen by 99.6% and was expected to reach only 7% of pre-COVID levels by the end of September.

In an attempt to boost passenger numbers, Singapore Airlines are reported to be looking to launch “flights to nowhere”. The flights will depart from Changi Airport and then around 3 hours later will land back at Changi. The flights could be bundled with hotels, shopping vouchers and limousine services in an attempt to woo passengers. All Nippon have already offered these types of flights with 90 minute sight-seeing flights from Tokyo.

Scoot have increased their cargo carrying ability by converting an Airbus A320ceo by removing seats to increase the cargo capacity by an additional 10 tonnes. There are plans to convert another plane in the same way.

OAG rate Singapore Airlines as 4* in terms of on-time performance.

AirAsia Group

The AirAsia Group is a low cost airline group that includes the affiliate airlines; AirAsia X, Indonesia AirAsia, Indonesia AirAsiaX, Philippines AirAsia, Thai AirAsia and Thai AirAsia X.

In August the Group reported that for the quarter ending 30th June that revenue had fallen 98% compared to 2019. Revenue was MYR119 million (approx. £22 million, $28.8 million) compared to MYR2.9 billion (approx. £544 million, $702 million) in the same quarter in 2019.

AirAsia Flight. Credit Macua Photo Agency on Unsplash

In September the group were in talks with a number parties in an attempt to raise MYR2.5 billion (approx. £469 million, $605 million)

Speaking in August, Tony Fernandez, Chief Executive of AirAsia, is optimistic for the future however, believing that demand will soon return in a similar way than it did following 9/11 and the SARS pandemic in 2003.

He believed that the low-cost carrier model is more resilient due to its low cost base. He also predicts that the airlines will be flying at between 70 and 100% capacity by the end of the year, a bold prediction.

Asia Aviation who operate as Thai AirAsia have seen revenue drop by 61% in 2020 compared to 2019. Passengers numbers from April to June 2020 were 95% lower than in 2019, carrying just 283,601 people in that period.

OAG rate AirAsia as 3*, AirAsia X as 2*, Indonesia AirAsia as 3*, Philippines AirAsia as 1* and Thai AirAsia as 4* in terms of on-time performance.

Thai Airways

In the first six months of 2020 Thai Airways made an operating loss of 28 billion Baht (approx. £695 million, $897 million). This compared to a loss of 6.4 billion Baht (approx. £159 million, $205 million) in the same period in 2019.

The latest available statistics showed passenger numbers were down 68.5% up to the end of July 2020 compared to the same period in 2019.

Thai Airways. Credit Arie Wubben on Unsplash

In May Thai filed for business rehabilitation with 332.2 billion Baht (approx. £8.2 billion, $10.6 billion) of liabilities at the end of June.

On 14th September Thai got court approval for its debt restructuring plan. It’s been reported that the rehabilitation process could take up to 7 years.

Customers of Thai with flights booked or cancelled are creditors however Thai has stated that they would be treated differently to other creditors and should be able to get refunds without going through the full creditor process, alternatively they would be able to opt for travel vouchers valid until the end of 2022.

OAG rate Thai Airways as 2* in terms of on-time performance.

Malaysia Airlines

As domestic travel has opened up again in Malaysia so the airline has increased its operations domestically.

The airline has implemented a number of promotions including kids travel and stay free and fixed price seats to help boost internal travel. Demand has picked up well and additional flights will be added from October on key routes.

OAG rate Malaysia Airlines as 3* in terms of on-time performance.

Philippine Airlines

In the first half of 2020 the airline posted losses of P20 billion (approx. £320 million, $413 million) as ticket sales dropped 35%.

In March the airline cut around 300 employees and plan to reduce its 6,000 strong workforce by around 35% in October.

The airline has delayed aircraft deliveries until 2025.

OAG rate Philippines Airlines as 2* in terms of on-time performance.

Vietnam Airlines

Vietnam Airlines reported a six month loss for the start of 2020 of 6.64 trillion dong (approx. £222 million, $284 million)

Vietnam Airlines has restarted a number of domestic routes and have also begun one way flights to Japan to meet the growing demand from people looking work, study and stay in Japan.

Vietnam Airways plane at Ho Chi Minh City airport. Credit Helmar Baechle on Unsplash

Vietjet Air

At the end of August VietJet Air announced that they were hoping to raise 2.6 trillion dong (approx. £86 million, $112 million) via domestic bonds. This follows a loss of 73.6 billion dong (approx. £2.5 million, $3 million) for the first half of 2020.

Nok Air

Like Thai Airways, Nok Air, a low cost Thai airline, has also filed for business rehabilitation.

The first 6 months of 2020 saw passenger numbers fall by 51% to 2.1 million from 4.26 million in 2019. This drop is only likely to increase as many flights are still grounded. They have continued with a number of domestic routes, although many of these have been operating at a loss.

Nok saw losses more than double in the first 6 months of 2020 compared to the same period in 2019.  Net losses for the period were 3.7 billion Baht (approx. £93 million, $120 million).

Bangkok Airways

Bangkok Airways with a higher dependence on tourist passengers than other Thai operators had losses of 2.6 billion Baht (approx. £64 million, $83 million) for the quarter ending 30th June, compared to a 530 million Baht (approx. £1.3 million, $1.7 million) loss for the same quarter in 2019.

OAG rate Bangkok Airways as 5* in terms of on-time performance.

Nok Scoot

In June Nok Scoot announced that it would be ceasing business due to the commercial pressures created by COVID-19.

The airline was created in 2014 as a joint venture between Scoot and Nok Air operating medium and long-haul routes throughout Asia.

Already suffering financial difficulties, COVID-19 was the last nail in the coffin and around 450 staff would be losing their jobs.

The Thai 7

Seven Thai airlines petitioned the government for “soft loans” totalling around 24 billion Baht (approx. £596 million, $769 million) to help them ride out the COVID-19 crisis.

The airlines, Bangkok Airways, Nok Air, Thai AirAsia, Thai AirAsia x, Thai Lion, Thai Smile and Thai VietJet also requested an extension on reduced excise tax on jet fuel and lowering of aviation fees.

The Thai government said that the loans would be made available from October, aviation fees would

Garuda Indonesia

Garuda announced a 10,587 billion Indonesian Rupiah (approx. £552 million, $712.7 million) loss for the first six months of 2020, contrasting with a 356 billion Indonesian Rupiah (approx. £18 million, $24 million) profit in the same period last year.

Domestic flights have continued meaning that the airline has still operated around 25% of its pre COVID flights, however overall passenger numbers were down 90%.

They have announced that they will be deferring planned aircraft deliveries, renegotiating leases and requesting staff take early retirement to help with their finances.

More than half of Garuda planes are currently unused as few international flights are taking place. Garuda have said that they expect the domestic market to be their main business for the remainder of 2020. The airline saw an increase of 58% from June to July on domestic passenger numbers as internal restrictions on travel were lifted.

The Indonesian government approved a (approx. $583 million) aid package to Garuda in July which will form part of a stock package.

OAG rate Garuda Indonesia as 5* in terms of on-time performance.

Cambodia Airways

Cambodia Airways have been in a bullish mood.

Chairman Chen Bo has committed to expanding the airline once the COVID-19 pandemic has ended, adding extra international routes.

The airline has continued to operate cargo flights.

Cambodia Angkor Air

The national flag carrier of Cambodia are also optimistic for the future with plans to expand domestic and international flights once the pandemic has finished.

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