Finansia Syrus Securities assesses that Asia Aviation's second-quarter 2026 results are likely to mark the bottom of the earnings cycle, and expects the third-quarter 2026 loss to narrow before the company has a chance to return to profit in the fourth quarter of 2026, helped by easing jet fuel prices, recovering margins, and added capacity for the high season. For 2026, the company has lowered its passenger target to about 19 million from 21 million, while the 2027 target is still under review in line with aircraft delivery plans and capacity allocation. AAV continues to prioritise maintaining fares and margins over aggressively gaining market share, so seat capacity in the third quarter of 2026 is expected to fall about 23 percent from a year earlier, before gradually adding some domestic and regional flights in the fourth quarter of 2026 as demand recovers. On fuel costs, Finansia Syrus believes jet fuel prices have already peaked. AAV has hedged about 13 percent of its third-quarter 2026 fuel consumption at an average price of 89 dollars per barrel, and aims to keep its hedging ratio at 10 to 30 percent of fuel use. At the same time, the company is focused on cost control and liquidity management by limiting new hires, delaying non-essential projects, preparing to roll over bonds worth 1.5 billion baht in the fourth quarter of 2026, considering additional sale and leaseback transactions for aircraft to manage cash flow, and planning to return two to four aircraft from the second half of 2026 through the first quarter of 2027 in line with the capacity reduction plan. On travel demand, advance bookings for the fourth quarter of 2026 remain close to last year's level even though ticket prices have risen, suggesting the market is beginning to accept higher fares. Finansia Syrus maintains a buy rating on AAV with a target price of 1.36 baht, based on 10.5 times 2026 EV to EBITDA, arguing that the current share price already reflects much of the near-term losses while the earnings recovery potential in 2027 to 2028 is not yet fully priced in. It also expects 2026 EBITDA to remain positive despite still-high fuel costs.
Asia Aviation Public Company LimitedEasing jet fuel prices and hedging reduce fuel costs, aiding margin recovery.
Finansia X Public Company Limited