THAI Records 3Q2017 Operating Profit of 739M Thai Baht

13th Nov 2017

The national airline of Thailand (51% owned by the government) Thai Airways International (THAI) reported an operating profit of 739 million baht ($22.33 million) for the third quarter of the year, up to 30th September. Last year, the carrier reported a loss of 836 million baht for the same period.

However, the airline also warned that competition will probably get stiffer, following the decision by the International Civil Aviation Organization (ICAO) to remove the red flag status from Thailand and allow Thai-registered carriers to operate international flights again.

According to Paul Yong, an analyst at DBS, higher prices of jet fuel will also contribute to the problem. He said:

The operating environment for full-service carriers in the Asia region remains highly challenging, especially on international routes, given intense price competition and strong capacity additions from both low-cost carriers and other full-service carriers.

THAI saw its revenue go up to 46.9 billion baht in this period, or 6.3% up from the same period last year thanks to a higher seat percentage and increased capacity. However, the average ticket fare dropped 7.5% for the period.

The 3rd quarter expenses for THAI went up 2.7%, mostly due to the government’s decision to tax jet fuel for domestic services and the price of fuel increasing.

In addition, Thai Airways also reported a net loss of 1.8 billion baht for the third quarter of the year. Last year, the carrier reported a 1.6 billion baht loss.

On Monday, the national carrier announced its plan to add more flights between Bangkok and Brussels, Oslo and Auckland. The carrier also wants to add more flights in Southeast Asia, particularly on routes flown by its budget arm Thai Smile.

Executive vice president of MFC Asset Management (one of the shareholders in THAI) Chakrit Puechpan said:

Thai Airways should focus on profitable routes like Japan and premium offerings.

The pressure on THAI increases as its low-cost rivals, Thai AirAsia X, NokScoot and Vietjet have announced their plans to add more services in Asia, following a successful recertification of their airline operating certificates (AOC) by the Civil Aviation Authority of Thailand (CAAT).

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