Following the easing of interstate border restrictions, domestic travel will likely recover ahead of international travel in 2022, giving airlines a lower international mix.
"Similarly, a majority of airlines will be relocating their capacities into domestic segment and hence, face stiff competition with limited flight deployment by the respective airlines, resulting to low asset utilisation," said Hong Leong Investment Bank Research in a report, where it upgraded its sector recommendation to"neutral".
To make matters worse, the discovery of the Omicron variant has raised international concern with governments staying cautious and re-assessing each other's risk."We believe current governments and public have higher awareness and increasingly embracing vaccination requirements and new normal practices," it said. to remain in the red in the near term given concerns over the recovery of international air travel.
It said AirAsia will benefit from the reopening of the regional economy, domestic air travel and regional air travel as the vaccination rate grows in the regional population and healthcare systems improve.
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