4 Airline Stocks Full of Losses They Cannot Takeoff!

The 1Q20 earnings of Thai aviation stocks was in line with the expectation of a net loss due to the impact of the coronavirus outbreak, causing a plummet in the global travelling demand.

The lower oil prices could have been a great opportunity for airline businesses, but the negativity from lockdown and flight restrictions were more than offset the opportunity to purchase oil at lower prices.

 

Thailand’s No.1 low-cost airline, Asia Aviation Public Company Limited (AAV), posted a net loss of 671 million baht in 1Q20 from a net profit of 497 million baht in 1Q19. The company recorded total revenue at 9,399 million baht, decreased 19% YoY.

Sales and services revenue declined by 30% to 7,812 million baht, while the number of passengers shrunk 23% to 4.5 million, especially a plummet of 41% in domestic passengers when compared to the same quarter last year. The average of ticket prices also plunged 10% to 1,401 baht per passenger in the quarter as well.

 

Even the boutique airline like Bangkok Airways Public Company Limited (BA) also flipped from booking a net profit of 504 million baht to record a net loss of 338 million baht in 1Q20. BA booked a lower revenue by 17.5% from 7,789 million baht in 1Q19 to 6,423 million baht in 1Q20.

The losses were due to lower income from airline business by 25.2% to 4,495 million baht, while the number of passengers decreased 23.3% compared with the same period last year.

 

Nok Airlines Public Company Limited (NOK) postponed the earnings announcement to August 14, but the outcome would not be any different than the two airlines mentioned above. The company has been recording net losses for years and the coronavirus outbreak has made the NOK’s business even worse.

 

As for the state-enterprise airline, Thai Airways International Public Company Limited (THAI), which is the talk of the town for several weeks, the Thai Cabinet will discuss over the rehabilitation plan in the meeting tomorrow, while the the State Enterprise Policy Office (SEPO) meeting had made it clear that the case of borrowing 50,000 million baht and being guaranteed by the Ministry of Finance would not occurred.

 

By the look of the current situation, recording a net profit in 2020 could be quite hard for the airline businesses. Thus, for those who want to retreat from the business, find a good chance to do so.