52 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 MANAGEMENT DISCUSSION ANDANALYSISFORTHEFULLYEAROF 2022 Executive Summary The global tourism industry finished the year on a strong note. Despite headwinds, the industry’s recovery is on track. Globally, air passenger traffic picked up steam in 2022 and rebounded significantly, reaching 68.5%1 of revenue passenger kilometres (RPKs) in 2019. The figures showed that tourism and air travel are in high demand along with improving traveller sentiment. Domestic travel recovered better in 2022, with international travel catching up gradually in the second half after many countries lifted restrictions on international borders. Nevertheless, Asia-Pacific continued to lag other regions due to slower border reopening, especially in China, which maintained a zero-COVID policy. According to the International Monetary Fund (“IMF”), 2022 global GDP grew by 3.4% year-over-year (“YoY”) pressured by China’s subdued growth and the Russia-Ukraine war. Consequently, the average Brent oil price in 2022 was at USD 100.9 per barrel, up 42% YoY deepened by the subsequent sanctions placed on Russia. Meanwhile, central banks’ monetary policies to combat high inflation rates may result in a short-term economic slowdown, particularly in the United States and Europe. This has created turbulence in currencies in which the USD hit a 13-year appreciation during the first nine months of 2022 but then highly depreciated in 4Q2022. The Thai Baht started the year at 33.6 Baht per USD and rose to 38.1 Baht per USD in 3Q2022 before finishing at 34.7 Baht per USD in 4Q2022. Thailand surpassed its 10 million tourist goal for 2022 with 11.25 million visitors, a leap from 428,000 the year before when strict travel restrictions were in place. The numbers, which exceeded the government’s goal, showed a significant improvement as Thailand attempted to recover its crucial tourism sector. In 4Q2022, there were 5.46 million tourist arrivals, compared with 3.61 million in the previous quarter, fuelled by relaxed economic conditions and year-end seasonality. As a result, the number of international arrivals recorded 11.2 million in 2022, a significant increase from 428,000 in 2021, with passengers from ASEAN, Europe, and South Asia accounting for 41%, 23%, and 11%, respectively. On the other hand, domestic tourism experienced strong demand, with 224.8 million total visits, increasing 208% YoY, supported by government stimulus packages and pent-up demand. In 2023, the Tourism Authority of Thailand (“TAT”) anticipates 30 million international visitors, including 7-8 million from China, Thailand’s largest source market prior to the pandemic. 1 The International Air Transport Association (IATA) 2022 performance of Asia Aviation Public Company Limited (“the Company”) and Thai AirAsiaCompanyLimitedhighly improvedbut pressured by unrealised FX loss. In 4Q2022, Thai AirAsia recorded the best operational quarter since COVID-19 supported by an accelerating number of passengers of 4.06 million with a load factor of 90%. With cost control, EBITDA in 4Q2022 turned profitable at Baht 1,628.9 million, the first time in 11 quarters. For 2022, Thai AirAsia carried 9.95 million passengers, while the overall capacity has recovered to 46% of the pre-COVID level (or 72% for 4Q2022). Underpinned by the 84% load factor, the Company’s total revenue stood at Baht 18,290.8 million, increasing 306% YoY. CASK continued to decrease to Baht 2.62, down 42% YoY. However, incorporating the Thai Baht depreciation and fuel price hikes during the year, the Company reported a net loss of Baht (8,214.4) million. Normalising the unrealised FX loss and loss from derivatives totalling Baht (1,460.0) million, the Company continued to narrow its EBITDA loss in 2022 to Baht (1,277.9) million, highly improved from Baht (3,109.6) million in 2021.
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