THAI’s Q3 operating profit improves

BANGKOK, 16 November 2017: Thai Airways International and its subsidiaries closed the third quarter 2017 with an operating profit of THB 739 million, an improvement from last year’s Q3 that accumulated a loss of THB 836 million.

The latest financial results for Quarter 3 suggest the airline’s transformation plan is progressing, although like other legacy carriers it is facing tough competition from low-cost airlines that are expanding regional flights from bases in Thailand.

In its statement to the Stock Exchange of Thailand the national airline reported revenue increased by 6.3% and non-fuel expenses “were efficiently controlled.”

The downside this year was the steady escalation of jet fuel prices up 11.3% in the third quarter.

However, after deducting one-time expenses, which mainly comprised of impairment loss of assets and aircraft and losses on foreign currency exchange, the wider picture indicates the airline is still dogged by losses. THAI and its subsidiaries reported a net loss of THB 1,814 million for the third quarter alone.

The airline’s executive vice president of corporate strategy and sustainable development, also acting president, Usanee Sangsingkeo, said that in the third quarter, THAI continued the third phase of its transformation plan aiming at “Sustainable Growth” by taking delivery of new aircraft, leased rather than purchased.

When compared to the end of 2016, THAI added  four new aircraft, giving it a fleet of 99 aircraft.  Aircraft use increased by 4.3% from 11.6 hours to 12.1 hours when compared to the same period last year. Production traffic (ASK) increased by 7.9%, but passenger traffic (RPK) increased by 14.9% from the same quarter of last year. The cabin factor averaged 78.2%, which was higher than 73.5 % last year and 5.99 million passengers were carried, and representing an 8.9% increase from quarter three, last year.

THAI and its subsidiaries’ operating profit was THB 739 million, compared with a loss of THB 836 million in the third quarter last year.

Total revenue was THB 46,928 million, an increase over the same quarter, last year, of 6.3% due to an increase of passenger traffic (+14.9%) and excess baggage revenue of THB 2,470 million (+6.9%), despite a drop in average passenger yield (fare revenue) by 7.5% due to intense price competition.

While total expenses amounted to THB 46,189 million, representing an increase of THB 1,227 million (2.7%) due mainly to an increase in fuel expenses of THB 1,032 million (+9.5%).  Non-fuel operating expense was close to that recorded last year.

During quarter three, THAI and its subsidiaries had one-time expenses of THB 537 million and impairment loss of assets and aircraft calculated at THB 1,502 million. In addition, the loss on foreign currency exchange was THB 829 million. Consequently, THAI and its subsidiaries reported an overall net loss of THB 1,814 million.

Loss attributable to owners of the parent amounted to THB 1,825 million.  Loss per share was THB 0.84 per share, THB 0.11 or a loss that was 15.1% higher than last year.

As of September 30, 2017, THAI’s consolidated  assets were THB 287,889 million, an increase of THB 4,765 million (1.7%) from 31 December, 2016. Total liabilities were THB 257,961 million, which was an increase of THB 8,425 million (3.4%) from 31 December, 2016. Shareholders’ equity stood at THB 29,928 million, a decrease of THB 3,660 million (10.9%) from 31 December, 2016, due to loss from operations for the first nine months of 2017.

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