In the recovering aviation industry, the Board of Directors has executed its business strategy effectively by increasing the operational fleet and opening new flight routes in both domestic and international markets. In light of the excellent performance achieved in 2023, the Board of Commissioners has expressed appreciation to the Board of Directors and their teams, as well as all employees who have performed their respective functions. The Board of Commissioners has provided advice and suggestions to the Board of Directors to continue striving to meet targets amidst the aviation industry's recovery momentum.

Dear Distinguished Shareholders and Stakeholders,

We are grateful to God Almighty as the commercial aviation industry recovers in tandem with the conclusion of the pandemic and increased mobility in 2023. AirAsia Indonesia has adopted an expansive strategy, increased the number of operational aircraft and established new routes in both home and regional markets.

We are convinced that aggressive efforts supported by collaborations, particularly with tourism stakeholders, have successfully optimised commercial potential, resulting in much higher business growth for AirAsia Indonesia than the previous year.

Please allow us to present the Board of Commissioners' Performance Accountability Report in the 2023 Annual and Sustainability Report. This report presents the Board of Commissioners' perspectives on the Board of Directors' performance, governance implementation, and business prospects as prepared by the Board of Directors.

Board of Directors’ Performance Assessment in 2023

The global economy continued to grow positively in 2023, albeit not as rapidly as the previous year. Geopolitical tensions in some regions, persistently high inflation, extreme climate changes, and slowing trade led to a global economic growth of 3.1% in 2023, according to the IMF.

In a sluggish global economy and increasing uncertainty risks, the fundamentals of Indonesia's economy remained strong. The Central Statistics Agency (BPS) stated that Indonesia's economy grew by 5.05% in 2023, primarily supported by the consumption and investment sectors.

National economic growth remained positive alongside controlled inflation at 2.61%. The purchasing power of the middle class was maintained, as evidenced by increased mobility and the tourism industry.

BPS data indicates that domestic tourist travels amounted to 7.5 million trips in 2023, an increase of 112.26% compared to the previous year. There was also an increase in international tourist (Wisman) visits to the country, reaching 11.7 million visits.

With increased mobility, the commercial aircraft industry recovered. Throughout 2023, BPS recorded that passenger departures on domestic and international airlines increased by 19% and 120% respectively.

In the recovering aviation industry, we assess that the Board of Directors has effectively implemented business strategies by adding operational aircraft and opening new flight routes in both domestic and international markets. AirAsia Indonesia expanded its operational aircraft from 16 to 23, resulting in increased passenger capacity.

In response to increasing travel demand, AirAsia Indonesia successfully operated 34 flight routes, 14 domestic and 20 internationals, with a total frequency of 400 flights per week. This operational achievement is considerably improved than the previous year, though not yet comparable to pre-pandemic levels.

The performance improvement of AirAsia Indonesia was accompanied by efforts to implement cost efficiencies. This policy had a positive impact on the financial performance in 2023, thereby providing added value to the shareholders of AirAsia Indonesia.

For excellent performance achievements in 2023, the Board of Commissioners expresses appreciation to the Board of Directors and its executives, as well as all employees who have performed their respective functions. The Board of Commissioners has provided advice and suggestions to the Board of Directors to continue striving to meet targets amid the momentum of the aviation industry's recovery.

Execution of Duties and Responsibilities by the Board of Commissioners

The Board of Commissioners has performed its supervisory functions over the operational management conducted by the Board of Directors throughout 2023. The Board of Commissioners also provided guidance, advice, and suggestions to the Board of Directors to continue striving to achieve the set targets as part of its oversight function.

The Board of Commissioners ensures that the oversight function is carried out in line with the Company’s strategic plan and is guided by the BOC Charter of AirAsia Indonesia. Supervision is partly conducted through the Board of Commissioners' Meetings and Joint Meetings with the Board of Directors.

The Board of Commissioners discusses, among others, the implementation of strategy and the achievement of operational and sustainability performance of the Company; the execution of corporate governance; human resources and technology; and other strategic issues, particularly those related to the business of AirAsia Indonesia.

In performing its oversight function, the Board of Commissioners is guided by the BOC Charter of AirAsia Indonesia. The execution of the Board of Commissioners’ oversight function is assisted by the Audit Committee and the Nomination & Remuneration Committee. Both committees have performed their duties effectively in line with their respective functions.

Views on the Corporate Governance Implementation

AirAsia Indonesia has implemented the principles of good corporate governance in every business activity. The Board of Commissioners continuously reviews, directs, and supervises by providing guidance to the Board of Directors on the Company's performance.

The Company’s corporate governance implementation is observed through the corporate govervance framework that includes governance structure, governance processes, and governance outcomes. The corporate govervance main organs, namely the General Meeting of Shareholders, the Board of Commissioners, and the Board of Directors, have each performed their functions with a unified spirit to maintain the sustainable growth of AirAsia Indonesia’s business.

AirAsia Indonesia also continues to internalize the Code of Conduct Guidelines and AirAsia Corporate Culture to all employees through competency development training and regular briefings. The implementation of best governance practices has supported the performance achievements of AirAsia Indonesia during 2023.

AirAsia Indonesia has also implemented a whistleblowing system very effectively. All procedures from complaint facilities, complaint follow-up to protection for whistleblowers are standardly regulated in the SOP (Standard Operating Procedure). Throughout 2023, there were no reports received in the whistleblowing system.

Views on Business Prospects as Prepared by the Board of Directors

The global economy in 2024 is predicted to remain overshadowed by risks of uncertainty stemming from factors such as the escalation of geopolitical conflicts, persistently high benchmark interest rates, climate change, and commodity price volatility. The IMF estimates global economic growth at 2.4% in 2024, lower than the 3.1% in 2023.

Despite increased risks of uncertainty, the Indonesian economy is expected to continue growing, mainly supported by the consumption and investment sectors. In the 2024 state budget, the government targets economic growth of 5.2%, higher than the actual economic growth in 2023 of 5.05%.

The recovery of the commercial aviation industry that occurred in 2023 is predicted to continue in 2024. The Indonesia National Air Carriers Association (INACA) stated that the trend of passenger growth will continue in line with the recovery of public mobility and the continuation of economic growth. Mobility is also supported by the high interest of citizens in traveling, especially among those with middle to upper economic capabilities.

AirAsia Indonesia, as part of the AirAsia Group, which is recognized as the world's best low-cost airline by Skytrax, will continue its expansion by adding more aircraft to its operational fleet to optimize available business opportunities. Additionally, the Company will open new potential routes to increase revenue.

Strengthening the main hubs in Jakarta and Denpasar will continue to support the business development of AirAsia Indonesia. Collaboration with businesses in the tourism sector will be intensified to support the increase in the number of airline passengers. The support for digitization through applications to facilitate passengers in booking flight tickets will also continue.

The Board of Commissioners assesses that AirAsia Indonesia will sustainably grow in 2024 in line with the favourable commercial aviation industry in Indonesia. The Board of Commissioners will continuously support the strategic initiatives of the Board of Directors to develop the business of AirAsia Indonesia.

Changes in the Composition of the Board of Commissioners

There were no changes in the composition of the Board of Commissioners during 2023.

Appreciation and Closing

The Board of Commissioners extends our gratitude to the Board of Directors who have accurately implemented the business strategy throughout 2023. We also would like to convey our appreciation to all employees who have performed their respective functions to develop the business of AirAsia Indonesia. We express our gratitude to the shareholders who have entrusted us with the supervisory function. We appreciate all the loyal passengers of AirAsia Indonesia and all strategic partners who have supported the efficient performance of AirAsia Indonesia's business. We are confident that with the tested values and work culture, AirAsia Indonesia, as part of the AirAsia Group, will continue to grow in the years to come.

Jakarta, May 2024

On Behalf of the Board of Commissioners

Tharumalingam Kanagalingam

President Commissioner