O N E R E P O R T 2 0 2 2 OVERVIEW BUSINESS OVERVIEW AND PERFORMANCE CORPORATE GOVERNANCE FINANCIAL INFORMATION SUSTAINABLE BUSINESS DEVELOPMENT 39 2.1 INTERNATIONAL The main competitors of Thai AirAsia on international routes including full-service carriers are (1) Thai Airways, (2) Cathay Pacific Airways, (3) Singapore Airlines, (4) Vietnam Airlines, (5) Air Macau, (6) Myanmar Airlines International, and (7) Malaysian Airlines. While low-cost carriers are (1) Tiger Airways, (2) Jetstar Airways, (3) Spring Airlines, (4) Thai Lion Air, (5) Thai VietJet Air, (6) IndiGo, and (7) ZIPAIR. 2.2 DOMESTIC Key main players in the domestic market include (1) Thai Airways, (2) Thai Smile, and (3) Bangkok Airways, while low-cost carriers include (1) Nok Air, (2) Thai Lion Air, and (3) Thai VietJet Air. 2023 BUSINESS STRATEGY Thai AirAsia is dedicated to offering top-notch and reasonably priced air travel to both Thai citizens and tourists visiting Thailand. As a leading low-cost carrier, the Company places a strong focus on customer experience and satisfaction, as evidenced by its latest globally-acknowledged on-time performance (“OTP”) rankings by OAG (2nd World’s Most On-Time Low-Cost Carrier) and Cirium (Top 3 Low-Cost Airline for OTP in the World), unparalleled safety record, and extensive route network. In 2022, Thai AirAsia further solidified its dominance in the domestic market with a one-third market share and plans to continue holding a significant share of passengers on all domestic routes. As we move into 2023, Thai AirAsia intends to resume all domestic routes that were in operation in 2019, which is projected to result in the transportation of 13 million passengers. On the international front, in addition to the ASEAN market, Thai AirAsia aims to capitalise on the potential influx of Chinese tourists to Thailand following the reopening of China’s borders. Building on its historical performance, the Company aims to capture 10-15 percent of the Chinese tourists visiting Thailand, while also maintaining its presence in the South Asia market through its sizable fleet. In total, the Company expects to carry not less than 20 million total passengers in 2023, compared to 22.2 million passengers carried in 2019. Currently, Thai AirAsia operates a fleet of 54 aircraft, with one aircraft to be re-delivered and 42 aircraft in active service. The Company does not have plans to add new aircraft in 2023, but it is prepared to bring additional aircraft into service as needed to meet demand, such as through an ad-hoc rotation of spare aircraft within AirAsia Group. In the future, if the fleet needs to be expanded, the Company plans to acquire A321neo and A320neo aircraft, the latest and most efficient models in the A320 Airbus Family, which offer up to 30 percent more capacity per flight and consume less fuel per passenger, compared to the current majority fleet of A320ceo. With four hubs located throughout Thailand, Thai AirAsia will continue to strengthen its common route network and capture growth in unique cross-regional routes. The Suvarnabhumi hub will remain to offer an opportunity for potential fly-thru and cargo services driven by international demand. As customer behaviour evolves, Thai AirAsia is continually improving its Super App features by leveraging its airline business and partnerships to expand its services into the travel-related areas such as food delivery and ride-hailing in early 2022. Additionally, Thai AirAsia is also implementing digitalisation at various passenger touchpoints, including the development of facial recognition technology for easy check-in in partnership with the airport and enhancing its back-end chatbot to better cater to customer needs. Overall, Thai AirAsia has set profitability and cash flow improvement as top priorities for 2023. To accomplish this, the Company will focus on implementing dynamic pricing strategies and prioritise route profitability. Cost control will also be a key focus, with efforts to further reduce cost per unit as more flights return to normalcy. The high maintenance expenses incurred in the previous year are expected to stabilise after completing the re-delivery phase and bringing all inactive aircraft back into service. The management team will also consider hedging foreign currency and fuel as deemed appropriate. The decision to furlough staff during the pandemic has proven beneficial for Thai AirAsia, allowing the Company to resume operations faster than competitors. This approach will be continued to ensure there is a sufficient number of staff ready to be called upon when the entire fleet becomes active. In addition, Thai AirAsia will continue to work with government agencies to support promotional activities for both domestic and international travel. This includes co-campaigns to launche new routes in smaller cities that have seen an increase in travel demand. Thai AirAsia will also be involved in discussions on important issues such as the appropriate level of excise tax and the long-term sustainability of the industry for the benefits of all stakeholders.
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