During the COVID-19 pandemic, it is understandable that Capital A was preoccupied with surviving. Maybank IB says its read of the group’s FY22A sustainability report was refreshing. It added there is room to improve especially on its net promoter
score and female representation on its BOD but it noted that Capital A has set ambitious ESG related targets which exhibits its commitment to ESG initiatives.
The house said the airline operator scores marginally above-average in its proprietary scoring methodology with an overall score of 59/100.
While Capital A’s carbon intensity has been rising due to increased fleet age (FY22A: 70.5g CO2/ASK, FY21A: 68.1g CO2/ASK), it is still lower than other leading low cost carriers. Going forward, it has set an ambitious target of capping CO2 emissions at 85% of 2019 levels by 2026. One of the key methods to achieve this is to gradually replace its largely A320 fleet with A321neos which emits 20%-25% less CO2 per seat compared with an A320 while also producing less nitrogen oxide and noise.
It’s net promoter score (NPS) dived to 36 in FY22A (FY21A: 60) due to flight delays and cancellations. It explained that these were due to difficulties in returning its aircraft to service and its NPS ought to improve going forward as more aircraft return to service. Yet, Maybank IB says it likes how Capital A launched Redbeat Academy in Oct 2020 to retrain staff in technology during the COVID-19 pandemic and aims to bring back all staff who were dismissed and furloughed because of the COVID-19 pandemic.
Maybank IB said its perusal of CAPITALA’s annual reports reveal that it never had more than 1 female director on its BOD. In fact, there were years where it had no female director on its BOD. That said, it acknowledges that CAPITALA currently has 1 female director on its BOD. Positively, CAPITALA targets ≥30% female representation on its BOD by 2026. The house also notes positively that the group targets ≥10% women pilots and engineers by 2026 when the global average is only c.6%.
