AirAsia successfully maintained resilience through the right strategies and by seizing growth opportunities amid uncertain conditions

Dear Distinguished Shareholders and Stakeholders,

We extend our gratitude to God Almighty for His blessings, enabling PT AirAsia Indonesia Tbk to navigate the uncertainties of 2024 with commendable achievements. The recovery of the aviation industry, driven by the increasing demand for air travel and the revival of the tourism sector, has provided AirAsia with opportunities to expand its connectivity by opening new domestic and international routes.

The Board of Commissioners remains committed to ensuring that the Company is managed responsibly in accordance with the Articles of Association and prevailing laws and regulations. This approach allows the Company to maximize its business potential while maintaining the trust of shareholders and stakeholders.

Furthermore, we would like to present key points from our report on the supervisory duties carried out over the Company’s operations for the financial year ending December 31, 2024. This report includes the Board of Commissioners’ views on the performance of the Board of Directors, the implementation of corporate strategies, corporate governance practices, and business prospects as formulated by the Board of Directors. Additionally, this report serves as the Board of Commissioners’ accountability to shareholders and stakeholders and as part of the Company’s commitment to implementing GCG principles.

Assessment of Directors’ Performance in 2024

We view 2024 as a year filled with challenges and dynamics for both the global and national economy and industry. The global situation, which has not fully recovered from the impact of the pandemic, remains a challenge for the Company. According to the International Monetary Fund (IMF) in its World Economic Outlook Update for January 2025, global economic growth for 2024 is projected at 3.2%, slightly weaker than the 3.3% recorded in 2023.

The challenging global economic conditions have also affected the national economy. Data from the Statistics Indonesia (BPS) shows that Indonesia’s economic growth in 2024 stood at 5.03%, slightly lower than 5.05% in the previous year. Despite this slowdown, the economy demonstrated strong resilience, supported by increased investment activity, manufacturing growth, stable domestic demand, and controlled inflation at 1.57%.

In the aviation industry, recovery continued alongside increasing public mobility. Based on BPS reports, the transportation and warehousing sector, including aviation, grew by 8.69% compared to the previous year. This growth was driven by a surge in domestic tourist trips, which reached 8.95 million, marking an 18.99% increase from the previous year. The majority of these trips were made by air, with Malaysia, Singapore, and Saudi Arabia being the primary destinations. Meanwhile, the number of international tourist arrivals in Indonesia reached 13.90 million in 2024, an increase of 19.05% compared to the previous year. Tourists from Malaysia, Singapore, and Australia contributed the most to this growth.

Given these dynamics, we believe that the Board of Directors has taken the right strategic steps to optimize the Company’s growth. This is reflected in the Company’s efforts to expand market penetration by launching new domestic and international flight routes, primarily focused on leisure travel. Throughout 2024, AirAsia introduced one new domestic route and seven new international routes. The Company also collaborated with government ministries and international tourism boards to strengthen brand partnerships, thereby enhancing AirAsia’s corporate image and brand presence amid the competitive aviation industry.

Through this strategy, AirAsia has operated 32 flight routes, consisting of 7 domestic and 25 international routes, with a total frequency of 432 flights per week. This operational achievement indicates strong performance, particularly with the increase in international routes and weekly flight frequencies operated by the Company through its subsidiaries.

From a financial perspective, we also observed an improvement in performance compared to the previous year. The Company’s revenue for 2024 reached Rp7.94 trillion, reflecting an increase of 19.90% from Rp6.63 trillion in 2023. The Company’s operational loss also decreased by 1.91%, from Rp805.76 billion in 2023 to Rp790.39 billion in 2024. However, external challenges also impacted AirAsia’s financial position, with the Company’s total assets recorded at Rp5.72 trillion in 2024, a decrease of 6.54% compared to Rp6.12 trillion in 2023.

We believe that the Company’s resilience throughout 2024 is the result of the dedication and hard work of the Board of Directors and all Allstars, successfully steering AirAsia in a positive direction. We remain committed to providing guidance and advice to the Board of Directors to ensure the Company strengthens its competitive edge and maintains sustainable growth.

Supervision of the Board of Directors’ Strategy Implementation

The Board of Commissioners consistently places great importance on overseeing the implementation of strategies formulated by the Board of Directors. This supervisory function is carried out in accordance with the Board of Commissioners Charter to ensure that the Company’s strategic execution remains on the right track while maintaining compliance with applicable laws and regulations. Additionally, the Board of Commissioners provides guidance and recommendations to the Board of Directors to support the achievement of the Company’s business targets.

In practice, the supervisory function of the Board of Commissioners is conducted through Board of Commissioners Meetings and Joint Meetings with the Board of Directors. Generally, these meetings discuss the implementation of strategies, operational and sustainability performance, corporate governance practices, human resources and technology, as well as other strategic issues related to the Company’s business.

To enhance the effectiveness of supervisory function, the Board of Commissioners is supported by the Audit Committee and the Nomination and Remuneration Committee. We believe that both committees have carried out their duties optimally in accordance with their mandates, including contributing to the supervision of corporate governance practices, regulatory compliance, and more effective organizational management. The Board of Commissioners continues to ensure that the strategic steps taken by the Board of Directors create added value for all stakeholders and support the Company’s business sustainability.

Outlook on Business Prospects Prepared by the Board of Directors

Entering 2025, the aviation industry is projected to maintain positive growth despite facing several challenges stemming from global and national uncertainties. The IMF forecasts global economic growth to reach 3.3% in 2025, slightly higher than 3.2% in 2024. This growth is also supported by a decline in inflation to 4.2% in 2025, although the level remains relatively high.

From an industry perspective, the International Air Transport Association (IATA) projects that the global aviation industry will experience strengthened profitability amid ongoing cost and supply chain challenges. Aviation industry revenue is expected to exceed USD1 trillion in 2025. The improving post-pandemic conditions have also driven an increase in passenger numbers, which are projected to reach 5.2 billion in 2025. The Asia-Pacific region is expected to be the highest passenger demand market (RPK), with projected growth of 18.6% in 2025, supported by market stimulus from the easing of visa requirements in several countries, including China, Vietnam, Malaysia, and Thailand.

Meanwhile, Indonesia’s aviation sector continues to face several challenges. The Indonesia National Air Carrier Association (INACA) notes that high operating costs, driven by the rising US dollar exchange rate, high aviation fuel and aircraft spare parts costs, and unrevised upper and lower fare limit regulations, remain key concerns. Additionally, high import duties on aircraft spare parts have led to aircraft and spare parts backlogs, affecting purchasing power.

Given these conditions, the Board of Commissioners remains committed to providing guidance and oversight to ensure the Board of Directors effectively manages the Company under all circumstances. Amid economic and industry dynamics, we see opportunities that the Company can optimize, particularly the increasing mobility of travelers, which has led to a rise in domestic and international tourist visits. This is reflected in the domestic tourist visits reaching 101.08 million trips, an increase of 11.63% in 2024, and international tourist arrivals reaching 1.24 million visits, an 8.72% increase in the same year. The Government also targets international tourist arrivals to reach 14–16 million, exceeding the 13.90 million recorded in 2024, which is expected to create a multiplier effect for both the Company and national economic growth.

The Board of Commissioners believes that the positive growth trend in the aviation sector in 2025 will continue to be supported by rising demand for air transportation, the expansion of the tourism sector, and increasing business travel. The Company is responding to these opportunities by opening new routes that contribute to profitability and enhancing passenger service capacity. Additionally, expansion strategies focused on strengthening key hubs in Jakarta and Denpasar will continue to optimize operations and improve efficiency.

Outlook on the Implementation of Corporate Governance

As the body responsible for overseeing the implementation of Corporate Governance, the Board of Commissioners believes that governance practices within the Company must be continuously improved over time. The ongoing development of organizational structures and policy frameworks, along with regular evaluation and monitoring of Corporate Governance, reflects the commitment of the Board of Commissioners and the Board of Directors to implementing corporate governance principles and practices across all operational and business aspects of the Company. We believe that a comprehensive Corporate Governance framework is essential to optimizing sustainable and responsible business operations.

In practice, the Board of Commissioners is supported by the Audit Committee and the Nomination and Remuneration Committee in ensuring the adequacy of Corporate Governance implementation and the supervision of the Company’s management. The Board of Commissioners also continues to internalize the Code of Conduct and AirAsia Corporate Culture among all employees through various training and development programs. These initiatives aim to build a corporate culture based on integrity, professionalism, and compliance with applicable regulations. Additionally, periodic briefings are conducted to ensure that all Allstars understand and apply good governance principles in their daily activities.

The Board of Commissioners considers that the Board of Directors, along with the Corporate Secretary function, the Internal Audit function, and the existing systems and procedures, have sufficiently implemented transparency practices in accordance with applicable regulations. The Board of Commissioners also optimizes risk management implementation to minimize potential negative impacts from both internal and external factors, which is a crucial aspect of ensuring the Company’s business continuity.

The Company is also committed to creating a clean and transparent work environment by establishing a Whistleblowing System (WBS). The WBS is designed to facilitate all stakeholders in reporting any violations. All procedures, from complaint channels and follow-up mechanisms to whistleblower protection, have been standardized in the form of a Standard Operating Procedure (SOP). Throughout 2024, the Company did not receive any reports through the WBS.

We believe that the implementation of Corporate Governance principles throughout 2024 has been carried out effectively, supported by strong collaboration between management, committees, and Allstars. Moving forward, the Company remains committed to continuously enhancing corporate governance implementation across all business activities. The Board of Commissioners is optimistic that through consistent efforts in Corporate Governance practices, the Company can maintain trust and strengthen stakeholder support.

Changes in the Composition of the Board of Commissioners

The composition and structure of the Board of Commissioners of the Company for the 2024 financial year underwent changes. Based on the resolution of the Extraordinary General Meeting of Shareholders (GMS) on August 20, 2024, the shareholders approved changes to the Company’s management structure by accepting the resignation of Mr. Tharumalingam Kanagalingam as President Commissioner and appointing Mr. Ahmad Al Farouk Bin Ahmad Kamal as President Commissioner.

Additionally, based on the resolution of the Extraordinary GMS on March 18, 2025, the shareholders appointed Mr. Julianto Sidarto as an Independent Commissioner of the Company. Therefore, the composition of the Board of Commissioners as of the approval of this report is as follows:

Period of January 1 - August 20, 2024

Name	Position	Basis for Appointment	Term of Office
Tharumalingam Kanagalingam	President Commissioner	AGMS July 6, 2022	July 6, 2022 - July 5, 2027
Reza Viryawan	Commissioner	EGMS October 25, 2022	October 25, 2022 - October 24, 2027
Sabam Hutajulu	Independent Commissioner	EGMS October 25, 2022	October 25, 2022 - October 24, 2027

Period of August 20, 2024 - March 18, 2025

Name	Position	Basis for Appointment	Term of Office
Ahmad Al Farouk Bin Ahmad Kamal	President Commissioner	EGMS August 20, 2024	August 20, 2024 – August 19, 2029
Reza Viryawan	Commissioner	EGMS October 25, 2022	October 25, 2022 - October 24, 2027
Sabam Hutajulu	Independent Commissioner	EGMS October 25, 2022	October 25, 2022 - October 24, 2027

Period of March 18, 2025 - Present

Name	Position	Basis for Appointment	Term of Office
Ahmad Al Farouk Bin Ahmad Kamal	President Commissioner	EGMS August 20, 2024	August 20, 2024 – August 19, 2029
Reza Viryawan	Commissioner	EGMS October 25, 2022	October 25, 2022 - October 24, 2027
Sabam Hutajulu	Independent Commissioner	EGMS October 25, 2022	October 25, 2022 - October 24, 2027
Julianto Sidarto	Independent Commissioner	EGMS March 18, 2025	March 18, 2025 – March 17, 2030

Appreciation and Closing

On this occasion, we would like to express our gratitude to the shareholders for their guidance and constructive input throughout 2024. We also extend our highest appreciation to the Board of Directors and Allstars for their hard work, commitment, and dedication, which have enabled AirAsia to maintain its position despite various challenges.

Additionally, we would like to thank AirAsia’s passengers and strategic partners for their trust and support, which have helped the Company sustain its resilience. We are committed to making all the experiences in 2024 a vital foundation for strengthening our commitment, dedication, and professionalism so that AirAsia can continue to grow even better in the years ahead.

Tangerang, 28 April 2025

On Behalf of the Board of Commissioners

Ahmad Al Farouk Bin Ahmad Kamal

President Commissioner