Kiatnakin Phatra Securities (KKPS) has revised up its core loss forecast for Thai AirAsia (AAV) in 2026 to 1,625 million baht from 900 million baht, and cut its 2027-2028 profit forecasts by 7-8% to reflect higher jet fuel costs. However, it expects the loss in Q2/2026 to be the trough, with a chance of returning to profit in Q4/2026, supported by peak tourism season, less capacity reduction, and ticket prices surging nearly 30% year-on-year. In Q3/2026, AAV plans to cut capacity by 23% year-on-year after suspending all domestic routes from Suvarnabhumi and international routes to Hong Kong. Meanwhile, jet fuel prices have surged from an average of $87 per barrel in Q2/2025 to approximately $135-140 per barrel in Q2/2026, leading to continued losses in Q3 but narrowing from the 2,100 million baht loss in Q2/2026. In Q4, it is expected to return to profit after cutting capacity by only 10% and with accelerating ticket prices. At the same time, AAV plans to sell and lease back two aircraft and terminate leases early for another 2-4 aircraft in the second half of 2026 to boost liquidity and reduce lease costs. Although maintenance costs will rise temporarily, the analyst is not concerned about cash flow as EBITDA turned positive in Q2/2026. A key point to watch is receivables from parent company AAGB, which rose to 14,600 million baht in Q2/2026 from 9,000 million baht in Q4/2025. AAGB plans to raise $1 billion and an additional 700 million Malaysian ringgit in credit facilities. KKPS expects AAV to post a net loss of 1,625 million baht in 2026 before turning to a profit of 1,370 million baht in 2027 and 1,829 million baht in 2028. It has also downgraded its recommendation to "Hold" and cut its target price to 1.20 baht from 1.30 baht.
Asia Aviation Public Company LimitedKKPS cut its target price to 1.20 baht and downgraded AAV to Hold while revising loss/profit forecasts on higher jet fuel costs.
