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 50 the risk if the Company has shareholders that do not comply with the regulations specified. This may have a serious negative impact on the Company’s business operations, including a risk of being suspended from the status of an airline in Thailand and may face a revoke of international aviation rights. In limiting such risks, prior to the closing date of share register book, the Company will verify names of Non-Eligible Persons and refuse with the share registra to accept whose shares which may cause the Company to lose its rights under the Air Navigation Act. Moreover, the Company has communicated to investors who do not belong to the categories described above to be aware of the risks and recommended them to buy the Company’s shares through the Non-Voting Depository Receipt (NVDR) instead. Emerging Risk 1. Challenges from flight suspension to/from China as the world’s largest aviation market Air travel has continued to recover from COVID-19 after more countries eased travel restrictions and opened up their borders. China is one of the world’s largest aviation markets and its reopening has positive impacts toward Thailand aviation and benefits Thai Airasia as a goldmine since prior to the pandemic. However, Thai Airasia keeps monitoring the situation of the pandemic which may become more severe as China flights resume, whereas some countries have imposed new COVID-19 measures on travellers coming from China. Since the virus continues to mutate and spread more easily, the effectiveness of the vaccines continues to wane. This may bring suspension rules on international flights to China and potential for the Company to lose revenue. Hence, the Company has carefully evaluated the impact of flight suspensions before operating and has studied the potential of new destinations such as flights to Japan and India to reduce business risks exposures. 2. Challenges arising from lack of readiness of personnel The pandemic has affected the operations of Thai AirAsia and possibly the operations of business partners including airport ground handling agents. These companies may reduce workforce by termination or suspension of employment contracts to keep business continuity during the crisis. Hence, they may need more time for recruitment and training prior to the resumption of flights, leading to business decelerations while the travel demand is increasing. This brings challenges to the Company in losing revenue and customers to competitors. Thai AirAsia realises the risk and has created an advanced planning framework by paralleling the process of budget allocation, resources, contract reviews and route planning. 3. Challenges in resuming routes to which Thai AirAsia has flown In recent years, important supply chains related to operations of airlines, including business partners, passengers, operators involved in operations have been affected by the COVID-19. Thailand’s aviation industry has slowed down, while various airlines necessitated operational executions in critical situations, which included reducing the number of flights, the number of employees, and the number of aircraft in flight operations, to maintain business continuity until the situation returns to normal. Although Thai AirAsia has been implementing risk management in advance and providing supportive measures in various forms, the effects from the pandemic have been persistent and continuous. As a result, the business may take a long time to recover. When the situation started to improve, driven by ease in travelling restrictions, Thai AirAsia implemented strategies to quickly resume its operations and strengthen its market position. This included a launch of new routes and destinations and plans to resume all flights flown before the pandemic. However, the operation might be affected if the Company cannot operate a sufficient number of active aircraft. Therefore, the Company has accelerated aircraft maintenance plans to activate the entire fleet to support more routes and flights in the future. Also, the Company has a contingency plan for aircraft leasing from the AirAsia group if the aircraft activation does not go as planned.
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