PCR test requirements. When it was first introduced, the PCR test was not easily available while being relatively expensive. For the year as a whole, our associate’s flight capacity was reduced by 60.1%. International flights were, to be expected, more heavily impacted, with capacity reducing 88.0% while domestic flight capacity dropped by 37.9%. In total, AirAsia Indonesia flew 801,673 guests during the year, achieving a load factor of 63.8%. To make up for the loss in revenue from scheduled flights, the airline placed more emphasis on chartered service and cargo operations. It flew a total of 507 chartered flights, compared to only 87 in 2020, while increasing its cargo operations by 722%, from 23 flights in 2020 to 189 flights in 2021. At the same time, every effort was made to contain costs. In addition to restructuring its loans, leases and debt, the airline trimmed its payroll while giving Allstars the option of taking unpaid leave. It also suspended all discretionary spending on noncritical items such as events, sponsorships, duty travel, annual parties and internal activities. As a result, it was able to reduce its overall costs by about 47.0% thus improve its net operating profit by 40.0% on a year-on-year basis. Going into 2022, AirAsia Indonesia will continue to focus primarily on domestic routes as the emergence of new virus variants means that international market recovery will be slower than expected. While resuming flights to popular destinations, our associate also plans to expand its domestic connectivity to other cities bringing its best-valued service to more Indonesians in support of the country’s efforts to revive the economy. Initiative Towards Business Segment Recovery Expand domestic connectivity to cities by bringing best-value service to Indonesians Aviation A i r A s i a A v i a t i o n G r o u p – A i r A s i a P h i l i p p i n e s Despite the harsh realities of the prolonged pandemic, AirAsia Philippines has continued to live up to its reputation of being a home-grown airline with the interests of local communities at heart. Even as it ensured its own survival, it has helped to make life better for Filipinos throughout the country while collaborating with the authorities to bring home citizens stranded abroad. The year 2021 continued to be bleak for the aviation industry in the Philippines, with international borders mostly remaining closed and varying restrictions on domestic travel depending on the intensity of Covid-19 infections. To manage, AirAsia Philippines continuously reviewed its capacity, adjusting this to match local government regulations which, in turn, greatly influenced demand for travel. The situation in the second and third quarters was particularly grim given surges in the pandemic. Between March and June 2021, a second national lockdown was implemented during which no leisure travel was allowed. Even when the lockdown was lifted, protocols varied from one local government unit (LGU) to another making it confusing and complicated to travel. Playing its part, AirAsia Philippines worked closely with various government agencies to standardise travel protocols while ensuring passenger safety. Throughout the year, it also collaborated with the Overseas Workers Welfare Administration (OWWA) and Civil Aviation Authority of the Philippines (CAAP) to help return Filipinos working abroad, as well as to repatriate foreigners working in the country. No less than 402 sweeper flights were organised, enabling a total of 28,548 stranded nationals to go home. Meanwhile, as an increasing number of the population received their vaccinations, the pandemic began to stabilise and, by the fourth quarter of the year, those who had been fully vaccinated were afforded enhanced mobility to travel. With the easing of travel guidelines, demand increased exponentially. Not only were guests booking for immediate travel (generally indicating travel for business), they were also making more medium-term bookings (indicating travel for leisure). In a survey commissioned by AirAsia in December 2021, seven out of 10 Filipinos said they were keen to push through with their planned air travel in the following nine months. In response, AirAsia Philippines resumed international flights to Hong Kong and launched a new route from Manila to Singapore while increasing domestic flight frequencies. The pick-up in demand was such that, by December, the airline was breaking records. The load factor on certain flights was hitting 95%, while the average for the month was 88.0%, the highest since the pandemic started. On 9 December, the airline achieved its highest daily sales in one-and-a-half years. Among the most popular destinations were Cebu, Cagayan de Oro, Boracay and Tacloban. M A N A G E M E N T D I S C U S S I O N A N D A N A L Y S I S A N N U A L R E P O R T 2 0 2 1 0 7 9
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