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Asia Aviation PCL: That which does not kill us makes us stronger—Nietzsche

  • Shallower core loss than expected
  • AAV reported a 1Q21 net loss of Bt1,865m
  • Our 2021 pre-restructuring core loss forecast is Bt3,285m

As soon as restructuring is completed and liquidity is no longer an issue, AAV will rally. Looking ahead, TAA will be one of only a handful of airlines to survive the COVID-19 era, so will benefit from lighter competition, economic recovery, and the return of tourists, 2022-23. We also expect the govt to accelerate the vaccination rollout in Thailand, enabling the lifting of quarantine requirements for international arrivals, which would boost AAV’s share price. BUY!

Shallower core loss than expected

AAV reported a 1Q21 net loss of Bt1,865m, deeper into the red by 178% YoY but shallower by 97% QoQ. The net loss was 9% deeper than our estimate (bigger extra losses than assumed) and 24% deeper than the consensus. Stripping out extra items, AAV’s core loss would be Bt1,091m, deeper into the red by 239% YoY and 3% QoQ. The core loss was 29% shallower than our estimate (lighter SG&A expenses and a bigger tax credit than assumed) and 8% shallower than the consensus.


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