Annual Report 2020

At the same time, various restrictions and requirements were imposed on domestic travel, with individual provinces enforcing their own conditions. At the outset, the Ministry of Transport limited the passenger load factor on aircraft to 50%. From 24 April to 31 May 2020 most major airports in the country ceased all commercial flights – including domestic routes – in line with large-scale social restrictions. In February 2021, the Ministry of Transport relaxed its load requirement to 70%; however, domestic air travellers are required to test negatively to the antigen rapid-test or polymerase chain reaction (PCR) test. AirAsia Indonesia resumed domestic operations on 19 June 2020, after a three-month hiatus, prioritising popular routes such as Jakarta-Bali and Jakarta- Medan. Demand picked up gradually, and by the fourth quarter our associate’s domestic capacity had increased by 631% quarter on quarter while the number of guests carried increased by 844%. For the year, its passenger load averaged 68.3%. Our associate is optimistic of international borders reopening in the last quarter of 2021 and looks forward to resuming its well-established routes. Meanwhile, it will continue to focus on its domestic network and has plans to open more new routes in the year ahead. Potential destinations include Makassar and West Papua in East Indonesia. AIRASIA PHILIPPINES Like AirAsia Indonesia, AirAsia Philippines also achieved a much-awaited turnaround in 2019 which has been set back due to the pandemic. Nonetheless, as a result of strict cost containment, route rationalisation, constant stakeholder engagement and reskilling of Allstars, our associate still performed commendably. International travel restrictions in the country began on 2 February 2020 when the government banned tourist-related travel between China and the Philippines. On 15 March, a Community Quarantine (lockdown) was imposed in Manila, which was then extended to other parts of the country. Domestic travel was banned from 17 March to 4 June and again from 4-19 August, due to a second wave of the pandemic. These restrictions were reflected in our associate’s numbers. In the pre-lockdown months of January and February, AirAsia Philippines averaged 1,760 domestic return flights and 620 international return flights per month. By June-September the average was 80 domestic and three international return services. Towards year end, domestic demand started to pick up, averaging 157 roundtrips per month from October till December. To further stimulate demand, our associate broadened its domestic network by launching two new destinations – Zamboanga and General Santos – in the southern island of Mindanao. Initially targeted to commence in March, flights to the “Tuna Capital of the Philippines” and “Asian’s Latin City” took off in October. Prior to launching these destinations, a number of chartered repatriation flights to and from the two cities had been mounted to assist in bringing Filipinos back to their hometowns. Subsequently the two destinations have been forecasted to provide vast economic opportunities including delivering a welcome boost for tourism in the region. Strategic capacity and route planning contributed to our associate achieving an 8% increase in RASK y-o-y from 4.70 US cents in 2019 to 5.06 US cents. A major priority during the year was to lend all the support it could to the government to repatriate stranded tourists and workers – both Filipino and foreign – as well as to transport essential cargo to areas where they were needed. This saw our associate operate 952 chartered flights in partnership with the Department of Foreign Affairs, the Civil Aviation Authority of the Philippines, Overseas Workers Welfare Administration, and other partners in the private sector. AirAsia Philippines also mounted 323 cargo flights to transport more than 1.5 million kilogrammes of medical equipment and supplies. As Chair of the Air Carriers Association of the Philippines (ACAP), AirAsia Philippines also used the downtime to collaborate with other major airlines in the country in lobbying for government support to uplift the aviation sector, and tourism more generally. In addition, our associate contributed in a significant manner by maintaining the highest level of safety in the current pandemic by reviewing all available guidelines and best practices for airlines and proposing new standards to be adopted by the local aviation industry. In addition, to better serve its guests, AirAsia Philippines engaged closely with Local Government Units (LGUs) and the national government to ensure strict adherence to all travel-related policies and protocols, which were constantly changing. These updates were shared with guests via email and text messages, ensuring they had sufficient time to fulfil all requirements before their flights. 77 ANNUAL REPORT 2020