THAI Airways reports 31% drop in profits due to strong Baht

THAI Airways International announced last week that a strong Thai Baht has caused the airline’s net profit to drop by 31%, even though it has been experiencing strong passenger numbers.

Net profit for the national carrier fell to THB4.2 billion in the quarter ending on the 31st of March, 2007. At the same time, pre-tax profit also dropped 31% to THB6 billion.

These drops come in the face of increases of 13.1% on passenger traffic, as well as 7.6% year-on-year growth of revenue, up this quarter to THB43.4 billion.

“The lower profit was mainly caused by a stronger baht compared to the same period of last year and came despite the fact that oil prices eased,” a senior official was reported telling a Bangkok local paper.

THAI Airways has also recorded a lower increase on their foreign operations, and has attributed this mainly to converting outstanding loans into Thai Baht.

Peter

Stronger THB would mean cheaper fuel would it not?

Well its not down to poor demand in the region as SIA has just announced a 72% increase in profits, a special dividend plus staff are getting six months salary as bonus - they have a strong buy indication too

http://www.reuters.com/article/tnBasicIndu...N32658920070511

I like Thai and am gold card on them but due to company policy its SIA now and I am warming to them ;-)

The only reason I fly Thai Airways is convenience (fly direct from BNE Australia to BKK) and lack of choice inside Thailand (Thai is the only airline which flies between BKK and KKC).

I have travelled Singapore Airlines in the past and to me they are the benchmark other airlines should aim at in terms of service (new planes, run on time, friendly service). Sorry - Thai Airways you are way behind in the aviation stakes - those couple of new planes you run occasionally on the BKK-BNE route isn't enough to keep me flying with you much longer.

Peter

I always enjoying travelling on Thai Airways, and don't understand how the strength of the baht could make that much difference in operating expenses. Surely it's not the fault of management practices......is it? Or of operating at two terminals in Bangkok?

I doubt the drop in profit is mainly due to the strong Baht.

The main reason is the inability to compete with other international carriers.

I always enjoying travelling on Thai Airways, and don't understand how the strength of the baht could make that much difference in operating expenses. Surely it's not the fault of management practices......is it? Or of operating at two terminals in Bangkok?

Yes but it's much easier to pin the blame on the strong Baht and saves face at the same time.