AAV shares fell sharply by 12.5% to 0.84 baht, down 0.12 baht, after Krungsri Securities took a Negative view on Asia Aviation Public Company Limited, even though it assesses that Thai AirAsia, wholly owned by AAV, will not be directly affected by AirAsia's severe financial risk. However, it faces indirect risk from the loss of competitive advantages, including the group's flight network, bargaining power in aircraft purchases, and other cooperation, as well as the risk that receivables from related companies could turn into bad debt, which could pressure profits and the target price. Krungsri Securities noted that the Malaysian government has begun planning to cope with AirAsia's financial problems by asking Malaysia Airlines and Batik Air whether they could take over AirAsia's domestic routes and passengers if a necessary situation arises. The issue emerged after AirAsia reported second-quarter 2026 results with a net loss of 831 million ringgit and current liabilities of more than 18.4 billion ringgit, while still owing at least 500 million ringgit in airport service fees to MAHB and facing pressure from higher jet fuel prices. AirAsia is currently rushing to raise up to 1 billion dollars from overseas bond markets, plus a domestic credit facility of another 700 million ringgit, to restructure its debt. It insists the fundraising target is sufficient for its needs and that the company continues to operate as normal. As for AAV, in its second-quarter 2026 statements it has more than 14 billion baht in related-party receivables, of which about 7 to 8 billion baht is overdue, equivalent to 0.59 baht per share, creating a risk that these receivables could become bad debt if AirAsia collapses, which would put further downside pressure on AAV's earnings and target price. Another factor to watch is the renewed intensification of war in the Middle East, which Krungsri Securities assesses leaves AAV with the highest risk in the sector from that issue. Although AAV's current share price of 0.84 baht is below Krungsri Securities' target price of 1.19 baht, the broker still does not recommend investing, advising investors to keep a close watch on two risk issues: the indirect impact of AirAsia's financial situation and the risk from war in the Middle East.
Asia Aviation Public Company LimitedKrungsri Securities turned Negative on AAV, flagging 7-8 billion baht of overdue related-party receivables from AirAsia that could become bad debt and pressure earnings and target price.
