Thai AirAsia is issuing debentures to raise some THB 2.0 billion ($58 million) to stabilize its financial position and for investments. The issuance is scheduled between June 27 and 29 and is targeted at institutional investors and so-called ‘high net worth individuals, parent the airline said on May 24. Thai AirAsia plans to raise another BHT 2 billion.
“Main use of the fund will be to support the airline’s recovery plans to initiate further growth of key domestic and international routes to capture increase in demand from the relaxation of travel restrictions in key markets of Thai AirAsia”, the carrier says in a media statement. The debentures have a tenor of two years with a coupon of 6.8 percent and are fully guaranteed by Asia Aviation. In November, Thai AirAsia said it would raise BHT 14 billion with convertible bonds and new shares to improve its cash position. This followed after a crowdfunding campaign in September.
The subsidiary of AirAsia has seen a couple of very difficult years when Thailand banned almost all domestic and international air travel because of Covid. Only later in 2021, domestic flights were resumed and special ‘pockets’ re-opened to attract foreign tourism. According to CEO Santisuk Klongchaiya, Thai AirAsia has resumed all its domestic services and is operating in eight countries on nineteen routes in Southeast Asia, including Cambodia, Vietnam, Indonesia, Singapore, Malaysia, Laos, and the Maldives.
Thai AirAsia currently operates a fleet of 53 Airbus A320ceo and neo family aircraft. It intends to return to 100 percent pre-Covid capacity on its domestic network before the end of the year. It targets to fly 10.4 million passengers on both the domestic and international network and reach a 78 percent load factor. Despite the recovery, load factors are now at 73 percent.
Thai AirAsia X bankruptcy protection
In its media statement, TAA stresses that the issuance is totally unrelated to the plan of its long-haul low-cost sister Thai AirAsia X to restructure its debts. Last week, the Bangkok bankruptcy court approved the bankruptcy protection plan. Details of the plan are scarce, but the carrier says that operations are unaffected and all 1.000 staff for the moment will keep their jobs. However, the rehabilitation process, which is expected to last between eight and twelve months, should result in significant cost reductions.
Thai AirAsia X plans to resume services to South Korea and Japan in June. The airline has two A330-300s available for service, while four more have been parked, as are two A330-900s. In April, the airline appointed a new CEO, Patima Jeerapaet.
Active as a journalist since 1987, with a background in newspapers, magazines, and a regional news station, Richard has been covering commercial aviation on a freelance basis since late 2016.
Richard is contributing to AirInsight since December 2018. He also writes for Airliner World, Aviation News, Piloot & Vliegtuig, and Luchtvaartnieuws Magazine. Twitter: @rschuur_aero.
