BANGKOK, 21 May 2018: Despite rising fuel costs, Thai Airways International and its subsidiaries achieved an operating profit of THB 3,836 million, for the first quarter of 2018, a 49.4% improvement over the same period last year
Consequently, THAI and its subsidiaries reported a net profit of THB 2,737 million, but it still remained THB 432 million (13.6%) short of last year’s first quarter’s performance, mainly do rising fuel costs.
The airline attributed the positive operating result to revenue increases from fares and excess baggage revenue, freight and mail revenue, and revenue from other activities as well as foreign exchange gains.
THAI reported THB 583 million gain in foreign currency exchange, which was mainly from balance sheet revaluation.
The one-time expense for the quarter was mainly from impairment loss of assets and aircraft at THB 2,473 million.
THAI Acting president, Usanee Sangsingkeo, said the airline’s business transformation plan continues to focus on controlling cost structure by adopting low-cost business models, transforming business units to become profit centres and implementing digital applications.
During that quarter, THAI took delivery of four new Airbus A350-900 that are now flying intercontinental and regional routes.
The airline has a fleet of 104 aircraft with nine more aircraft on the way. It needs to retire or sell aircraft that are less fuel efficient, some grounded waiting for a sale.
There is still reason for concern. Production traffic (ASK) increased by 4.9%, while passenger traffic (RPK) increased by 2.2%. This resulted in the average cabin factor declining to 80.6%, down from 82.8% last year.
The airline’s passenger uplift was 6.25 million representing 4.1% decline on last year.
THAI and its subsidiaries’ total revenue was THB 53,466 million, which increased by THB 3,662 million, or 7.4% when compared to the same period last year.
Total expenses were THB 49,630 million, up THB 2,393 million (5.1%) on the back of the increase in fuel expenses of THB 1,189 million (9.3%). The fuel price increased by 22.8% during the three-month period.
Non-fuel operating expenses increased by THB 1,280 million (3.9%) from last year, mainly from the increased cost for aircraft repairs and maintenance together with aircraft lease and spare parts due to the higher number of leased aircraft.
The one-time expense in this quarter was mainly from impairment loss of assets and aircraft at THB 2,473 million, resulting from the significant decrease in the value of aircraft held for sale, especially the Airbus A340, which was assessed by standard appraisers.
THAI had a THB 583 million gain in foreign currency exchange, which was mainly from balance sheet revaluation. Consequently, THAI and its subsidiaries reported a net profit of THB 2,737 million, THB 432 million (13.6%) lower than last year.
Profit attributable to owners of the parent was THB 2,717 million. Profit per share was THB 1.24, THB 0.21 or 14.5% lower than last year.
As of March 31, 2018, total assets were THB 286,169 million, an increase of THB 5,394 million (1.9%) from December 31, 2017. Total liabilities were THB 251,413 million, which was an increase of THB 2,651 million (1.1%) from December 31, 2017. Shareholders’ equity totaled THB 34,756 million, an increase of THB 2,743 million (8.6%) from December 31, 2017, due to profit from operations).
