Thai Airways takes off on tourism revival to report THB16-billion profit

The national carrier reported net profit of 16.31 billion baht for the period January to September, as the tourism sector continues its steady recovery process, THAI's chief financial and accounting officer, Cherdchome Therdsteerasukdi, said.

THAI is preparing to receive transfer of more aircraft from Thai Smile Airways to reach a total of 20 within the first quarter of 2024 to replace and increase flight coverage.

THAI on Friday submitted the financial statements of the airline and its subsidiaries for the third quarter and for the nine months (ending September 30) of 2023, to the Stock Exchange of Thailand.

The key takeaways were:

▪︎ THAI and its subsidiaries reported a net profit of 1.55 billion baht in the third quarter, a turnaround from the previous year's loss of 4.78 billion baht.

▪︎ The profit attributable to the parent company is 1.54 billion baht, or equal to 6.70 baht per share, compared to the 2,190 baht loss per share in the same period of last year.

THAI's EBITDA (earnings before interest, tax, depreciation and amortisation) after deducting cash payments for lease liabilities, including aircraft lease expenses calculated based on actual aircraft usage, was 8.36 billion baht, up 2.28 billion baht year on year, Cherdchome said.

As a result, the cumulative performance for the first nine months of this year, shows a profit of 16.31 billion baht, compared to a loss of 11.25 billion baht in the same period of last year.

Profit from core operations in the third quarter of THAI and its subsidiaries before financial costs, excluding one-time items, was 7.72 billion baht, more than double the 3.80 billion baht during the same period last year.

Total revenue for the third quarter amounted to 37 billion baht, up 12.6% year on year, driven mainly by an increase in passenger transport revenue of 6.46 billion baht (26.4%), as the company increased flight frequency on popular routes.

Other business activities contributed an additional 232 million baht (12.5%), primarily from an increase in passenger numbers of the subsidiary airlines, he said.

The total expenses amounted to 29.29 billion baht, 349 million baht (1.2%) higher than the previous year, partly due to increased production and/or transport volumes.

As of September 30, THAI and its subsidiaries operated a total of 68 aircraft, with an aircraft utilisation rate of 12.1 hours, an increase of 21.5% in available seat kilometres, and a 22.0% increase in revenue passenger kilometres.

The average cabin load factor was 77.3%, higher than the previous year's average of 77.0%, with a total of 3.27 million passengers transported, a 22.0% increase year on year, he said.

Meanwhile, in the third quarter of this year, THAI continued to execute its business recovery plan, focusing on increasing revenue from transportation, expanding and improving fleet efficiency, and capitalising on idle assets to enhance overall competitiveness, Cherdchome said.

Key operational activities in this quarter included:

▪︎ Expanding flight routes and frequencies to meet the growing demand of Thai and international tourists, particularly in the Saporo, Japan route

▪︎ Implementing fleet efficiency improvements

▪︎ Receiving one A350-900 aircraft from November 1 of this year, to serve routes to China during the high tourism season and to support the industry's recovery

▪︎ Selling idle assets, including two B747-400 aircraft and one A340-68 aircraft, along with unused engine parts, resulting in complete transfer of ownership to the buyers.

Additionally, THAI plans to receive the transfer of three A320-200 aircraft from Thai Smile Airways, bringing the total to six, to enhance operational efficiency and plan and develop flight routes to better meet passenger needs, he said. The gradual transfer of aircraft is expected to be completed by the first quarter of next year, allowing for more effective aircraft management without impacting passenger services, Cherdchome added.

As of September 30 of this year, THAI and its subsidiaries had total assets of 234.29 billion baht, an increase of 18.2% from December 31, 2022. Total liabilities have increased by 7.4% to 289 billion baht from December 31, 2022. The negative equity of THAI and subsidiaries is 54.71 billion baht, down by 16.32 billion baht, according to the financial statements submitted to the SET.