BANGKOK, 4 March 2019: Thai Airways International reported a net loss of THB 11,569 million for the fiscal year 2018 ending 31 December.
In a filing presented to the Stock Exchange of Thailand late last week, the airline and its subsidiaries reported earnings reached THB 199,500 million, a 3.9% increase over 2017, but higher operating expenses, fierce competition and unpredictable high fuel prices, the steepest in fours years, dented performance.
As a result, the airline in 2018 suffered an operating loss of THB 9,058 million compared to a THB 2,856 million profit in 2017.
THAI President, Sumeth Damrongchaitham, noted that in 2018, THAI took delivery of five Airbus A350-900 aircraft, while decommissioned two Boeing 737-400 aircraft, giving it 103 active aircraft as of December 31, 2018, an addition of three aircraft when compared to 2017. Aircraft utilisation was 12 hours the same as the previous year.
Flight operations returned a mixed performance. Production traffic (ASK) increased by 2.9%, while passenger traffic (RPK) improved 1%, but average cabin factor declined to 77.6% lower than last year’s 79.2%.
Passengers carried at 24.3 million declined 1% on the previous year.
This year, THAI changed accounting guidelines such as the estimated residual value of aircraft and spare engines from 10% to 6% of the initial cost value resulting in an increase of THB 3,129 million in depreciation of aircraft and spare engines in 2018. It also reviewed duration of sold, but unused tickets, which was previously recognised as revenue after the date of issue reached 24 months. That benchmark was changed to 15 months, again raising passenger revenue in 2018 by THB 1,028 million.
Total revenue reached THB 199,500 million, an increase of THB 7,554 million (3.9%) from different revenue sources including passenger and excess baggage revenue, freight and mail revenue, revenue from other activities, and other income.
Total expenses reached THB 208,558 million which increased THB 19,468 million (10.3%) over 2017 due to an increase in fuel expenses (THB 9,881 million +19.7%). Non-fuel operating expense increased by THB 9,802 million (7.3%) due to the increase of aircraft maintenance and overhaul costs, aircraft leases and spare parts, and depreciation and amortization expenses.
This year THAI and its subsidiaries had impairment loss of assets and aircraft, to the tune of THB 3,459 million, but made gains in foreign currency exchange to the amount of THB 911 million, mainly from loan revaluation.
But the bottom line was THAI and its subsidiaries reported a net loss of THB 11,569 million with a loss attributable to owners of the parent amounting to THB 11,625 million. Loss per share was THB 5.33 while last year’s loss per share was THB 0.97.
However, THAI implemented a transformation plan during 2018 to solve negative retained earnings and enable THAI to generate a sustainable profit in the future.
In 2019, THAI plans are considerably more aggressive to generate an increase in revenue and make various improvements including fielding a modern and competitive fleet and services enhancements from ground to sky. Commercial strategies will focus on digital marketing and ancillary revenues, business expansion such as Maintenance Repair and Overhaul (MRO) at U-Tapao Airport as well as human resource improvements and appropriate financial restructuring.
