Thai Airways Net Profit Falls Sharply In Q3

[george]

THAI net profit falls sharply in Q3

BANGKOK: -- Thai Airways International (THAI), the national flag carrier, has announced that its sales and service profit during the third quarter of 2007 financial year, from April 1 to June 30, dropped dramastically 85.6 per cent.

Sales and service profit during the period stood at Bt114 million while its net profit was only Bt68 million.

Blaming the local political problem and the sharp appreciation of the Thai currency, the baht, THAI said its sales and service profit during the period tumbled 88.1 per cent from the corresponding period of 2006. It said its net profit declined 85.6 per cent from April-June last year.

Net profit per share during the third quarter this year was at Bt0.04, it said.

Total net profit during the first nine months of 2007 financial year, starting from October 1, 2006 to June 30, 2007, stood at about Bt8.33 billion, down from Bt2.16 billion net profit registered during the comparable period of the 2006 financial year. Profit per share fell to Bt4.90 from Bt6.17.

--TNA 2007-08-11

[Mid]

and this is possible how , with the record arrivals published ??

[Solosiam]

What about the Big companies that produced higher than expected results, like Big C for example.

There were twice as many than posted lower than expected results.

[VegasVic]

and this is possible how , with the record arrivals published ??

These latest numbers from Thai Airways and the rest of the struggling export sector are just a harbinger of things to come if the baht does not make an about face!

[londonthai]

Total net profit during the first nine months of 2007 financial year ... stood at about Bt8.33 billion, down from Bt2.16 billion

something doesn't make much sense for me.

anyhow - for the last few years thai airways international is too expensive for me to travel to thailand (altough I love service on this airline), so I am choosing the other carriers. Instead of flying half-empty they might think about giving some special offers from time to time. It's called proper menagement - blaming financial problems on the military junta is not an answer (even for me, junta hater)

[vermin on arrival]

I'm not surprised by this. I used to fly Thai all the time even though it was more expensive, but lately the prices seem to be way out of wack and are much much greater those of their competitors. They seize any excuse they can use to raise prices. The only flight which seems to be a good value is the direct flight to JFK in the brand new planes. I don't anticipate using Thai again anytime soon unless its prices start to come down.

(george @ 2007-08-11 17:04:24) *

Total net profit during the first nine months of 2007 financial year ... stood at about Bt8.33 billion, down from Bt2.16 billion

something doesn't make much sense for me.

This doesn't make sense to me either.

[bonna7]

Agree that the price of Thai is just too high. And, more importantly, they have many REALLY old planes as well!

How does that work, really old planes and higher prices than the competitors?

[midas]

Agree that the price of Thai is just too high. And, more importantly, they have many REALLY old planes as well!

How does that work, really old planes and higher prices than the competitors?

Well with these latest losses you can bet one thing

- the fares will go even higher because that's the way things

work in LOS

[slimdog]

Total net profit during the first nine months of 2007 financial year ... stood at about Bt8.33 billion, down from Bt2.16 billion

something doesn't make much sense for me.

The correct reading should be:

Total net profit during the first nine months of 2007 financial year ... stood at about Bt8.33 billion, down Bt2.16 billion

Basically 3rd Quarter figures compared to one year ago are:

Income

Tickets sales increased from Bt 33.5 Billion to Bt 35.8 Billion

Freight sales decreased from Bt 6.3 Billion to Bt 6.2 Billion

Mail charges decreased from Bt 264 Million to Bt 250 Million

Giving a total income increase from Bt 42.1 Billion to Bt 44.5 Billion

Outgoings

Personnel Charges increased from Bt 7 Billion to Bt 7.3 Billion

Fuel costs decreased from Bt 14.8 Billion to Bt 14.4 Billion

Inventories and supplies stayed the same at Bt 2.3 Billion

Leasing of aircraft increased from Bt 1.2 Billion to Bt 1.6 Billion

Flight Operations increased from Bt 9.4 Billion to Bt 11.5 Billion

Depreciation of assets increased from Bt 3.8 Billion to Bt 4.4 Billion

Marketing increased from Bt 730 Million to Bt 850 Million

Insurance decreased from Bt 350 Million to Bt 114 Million

Pay to board of Director decreased from Bt 4.6 Million to Bt 2 Million

Other operating expenses increased from Bt 1.3 Billion to Bt 1.6 Billion

Giving a total expense increase from Bt 41.1 Billion to Bt 44.4 Billion

Total Profits decreased from Bt 959,396,459 to Bt 113,795,430

Source: SET

[vermin on arrival]

Agree that the price of Thai is just too high. And, more importantly, they have many REALLY old planes as well!

How does that work, really old planes and higher prices than the competitors?

Yes, the planes they use for most of their local Asian trips are really old. It makes me wonder how much they are investing in their infrastructure, and how much they are just trying to milk the existing equipment for maximum profits. You would think that with the prices they charge they would have top quality planes, but in fact it seems to be the opposite.

Yes, Midas. I wouldn't be surprised if this decline in profits led to another price increase. It all too often seems to be the response to fewer customers or lower profits in the LOS.

[londonthai]

"Flight Operations increased from Bt 9.4 Billion to Bt 11.5 Billion

Depreciation of assets increased from Bt 3.8 Billion to Bt 4.4 Billion

...

Insurance decreased from Bt 350 Million to Bt 114 Million"

I would assume that because of the old aircrafts it's more expensive to operate them (they brake abroad - you have to fly a replacement airplane or replacement engines/other parts, give passengers hotels, compensate them for inconvenience, change the crews rota etc).

what can worry, that isurance decreased over threefold - I would expect 10 or 20% change due to good safety records, but over 300% decrease is not natural. One can assume, that the company slashed insurance of some essential services

[Tawai]

calling Suvannaphum the hub for SEA is a joke. With Don Muang operating properly as international airport, I was able to do Bali - Chiang Mai in one day, though CNX - DPS was not possible.

Consequence for me is NOT using THAI again, fly via Singapore now, can do both ways without spending a night in BKK (one hour away from home this is a pain in the a..).

SIA with help of Silk Air can arrange with only one daily flight CNX - SIN much better than THAI with 13 or so

Managment of THAI must have some real geniuses to coordinate their flight schedules like that,...

No wonder they lose customers and money.

Leo

[Carmine6]

Agree that the price of Thai is just too high. And, more importantly, they have many REALLY old planes as well!

How does that work, really old planes and higher prices than the competitors?

I didn't expect to ever fly Thai Airways for Los Angles to BKK, but my last booking they were the lowest price available. I generally book about a month before travel so the cheaper deals are gone by then, but I'm not paying last minute fares which are about twice as high. Other airlines have really raised prices and since Thai is the only direct flight it was an easy choice. If you want to see ridiculously high fares, check the flagship US carriers.

An investor presentation on Thai's website shows them with record cabin factors (% of seats filled) last year and higher this year. Must have streamlined routes which causes complaints like Tawai's.

[midas]

If you want to see ridiculously high fares, check the flagship US carriers.

I couldnyt understand anyone choosing flagship US carriers anyway with such

a wonderful choice of other SE Asian airlines available

[Moruya]

I'm afraid that whilst I used to use Thai as my airline of choice, I have switched to SQ. Fed up with old planes, being dumped on the tarmac into a bus, shockingly poor standard of cabin crew (not getting passengers strapped in, hanging around talking and then running for their seats mid take-off...). Many of my colleagues have also done so for the same reasons.

[bonna7]

Yeah, for local flights might as well use Airasia or Nok air, service is almost the same anyway.

The thing is, even Aeroflot has newer and nicer planes than Thai! hehe, won't be flying Thai again for a looong time. Had a plane from Sydney to BKK, and it was literally scary.... It was so old and crappy...

[palm]

Total net profit during the first nine months of 2007 financial year ... stood at about Bt8.33 billion, down from Bt2.16 billion

something doesn't make much sense for me.

The correct reading should be:

Total net profit during the first nine months of 2007 financial year ... stood at about Bt8.33 billion, down Bt2.16 billion

Basically 3rd Quarter figures compared to one year ago are:

Income

Tickets sales increased from Bt 33.5 Billion to Bt 35.8 Billion

Freight sales decreased from Bt 6.3 Billion to Bt 6.2 Billion

Mail charges decreased from Bt 264 Million to Bt 250 Million

Giving a total income increase from Bt 42.1 Billion to Bt 44.5 Billion

Outgoings

Personnel Charges increased from Bt 7 Billion to Bt 7.3 Billion

Fuel costs decreased from Bt 14.8 Billion to Bt 14.4 Billion

Inventories and supplies stayed the same at Bt 2.3 Billion

Leasing of aircraft increased from Bt 1.2 Billion to Bt 1.6 Billion

Flight Operations increased from Bt 9.4 Billion to Bt 11.5 Billion

Depreciation of assets increased from Bt 3.8 Billion to Bt 4.4 Billion

Marketing increased from Bt 730 Million to Bt 850 Million

Insurance decreased from Bt 350 Million to Bt 114 Million

Pay to board of Director decreased from Bt 4.6 Million to Bt 2 Million

Other operating expenses increased from Bt 1.3 Billion to Bt 1.6 Billion

Giving a total expense increase from Bt 41.1 Billion to Bt 44.4 Billion

Total Profits decreased from Bt 959,396,459 to Bt 113,795,430

Source: SET

tut tut! Surely you know the posting of financial facts on TV is frowned upon by those who prefer to make sweeping statements (or guesses) on the cause of a Thai companies increase or decrease in profits.

[highdiver]

Total net profit during the first nine months of 2007 financial year ... stood at about Bt8.33 billion, down from Bt2.16 billion

something doesn't make much sense for me.

The correct reading should be:

Total net profit during the first nine months of 2007 financial year ... stood at about Bt8.33 billion, down Bt2.16 billion

Basically 3rd Quarter figures compared to one year ago are:

Income

Tickets sales increased from Bt 33.5 Billion to Bt 35.8 Billion

Freight sales decreased from Bt 6.3 Billion to Bt 6.2 Billion

Mail charges decreased from Bt 264 Million to Bt 250 Million

Giving a total income increase from Bt 42.1 Billion to Bt 44.5 Billion

Outgoings

Personnel Charges increased from Bt 7 Billion to Bt 7.3 Billion

Fuel costs decreased from Bt 14.8 Billion to Bt 14.4 Billion

Inventories and supplies stayed the same at Bt 2.3 Billion

Leasing of aircraft increased from Bt 1.2 Billion to Bt 1.6 Billion

Flight Operations increased from Bt 9.4 Billion to Bt 11.5 Billion

Depreciation of assets increased from Bt 3.8 Billion to Bt 4.4 Billion

Marketing increased from Bt 730 Million to Bt 850 Million

Insurance decreased from Bt 350 Million to Bt 114 Million

Pay to board of Director decreased from Bt 4.6 Million to Bt 2 Million

Other operating expenses increased from Bt 1.3 Billion to Bt 1.6 Billion

Giving a total expense increase from Bt 41.1 Billion to Bt 44.4 Billion

Total Profits decreased from Bt 959,396,459 to Bt 113,795,430

Source: SET

tut tut! Surely you know the posting of financial facts on TV is frowned upon by those who prefer to make sweeping statements (or guesses) on the cause of a Thai companies increase or decrease in profits.

[Payboy]

time to add more water to their pathetic champagne welcome drink......and put the champagne glasses even further behind the bilge water and gutter tea glasses on the serving tray....

[londonthai]

they never gave me champagne - I was offered singa or chang to choose from

[midas]

Agree that the price of Thai is just too high. And, more importantly, they have many REALLY old planes as well!

How does that work, really old planes and higher prices than the competitors?

Well with these latest losses you can bet one thing

- the fares will go even higher because that's the way things

work in LOS

THAI to hike air fares in October

http://www.bangkokpost.com/breaking_news/b...s.php?id=121300

These people are so predictable and unimagiative Thai would be one of the

lat airlines I would ever chose to fly on - and meanwhile the gap for value for money

between Thai and Singapore Air gets wider and wider ..............................

[Mid]

from the link above

"The strategy will encourage passengers who fly the more popular routes to fill in seats on routes that aren't popular," he said. "The only difference between these two routes is the flight time."

"Thai Airways' economy class seats will also be on par with other airlines once a new fleet of aircraft is in service."

Bueller ??

[londonthai]

with executives like him, thai airways has a small chance to improve

[Carmine6]

from the link above

"The strategy will encourage passengers who fly the more popular routes to fill in seats on routes that aren't popular," he said. "The only difference between these two routes is the flight time."

"Thai Airways' economy class seats will also be on par with other airlines once a new fleet of aircraft is in service."

Bueller ??

I'll be a lone voice and say I think this is a good plan. Their passengers are not that price sensitive. Even without the price increases, there already are lots of cheaper options yet many people fly Thai. Thai's economy class seems to sell out way before other airlines so I think the demand is there.

"THAI will start by re-adjusting fares for routes that are particularly popular with passengers, ..." Code for economy is full, so we're going to charge them more.

If customers are willing to take a less popular flight earlier in the day, later in the day or through a different city, that was a seat that wasn't going to sell anyway, but they'll likely find someone else to buy that original seat. If they don't sell that original seat, they're still better off because everyone else is paying more. They'd have to net lose more customers than the price differential covers to have less revenue. For example if 100 people usually fly a flight and are now paying 3% more, they'd have to lose more than 3 people to lose revenue.

What he isn't saying but is probably expecting to happen is that more people will opt to upgrade to premium economy. Last flights I flew, economy was packed, yet premium economy was empty. If economy is full, the only way to make more money is charge more or get people to upgrade.

I do think they should go the next step and drop premium economy a bit to really make it attractive.

[Morty]

Total net profit during the first nine months of 2007 financial year ... stood at about Bt8.33 billion, down from Bt2.16 billion

something doesn't make much sense for me.

The correct reading should be:

Total net profit during the first nine months of 2007 financial year ... stood at about Bt8.33 billion, down Bt2.16 billion

Basically 3rd Quarter figures compared to one year ago are:

Income

Tickets sales increased from Bt 33.5 Billion to Bt 35.8 Billion

Freight sales decreased from Bt 6.3 Billion to Bt 6.2 Billion

Mail charges decreased from Bt 264 Million to Bt 250 Million

Giving a total income increase from Bt 42.1 Billion to Bt 44.5 Billion

Outgoings

Personnel Charges increased from Bt 7 Billion to Bt 7.3 Billion

Fuel costs decreased from Bt 14.8 Billion to Bt 14.4 Billion

Inventories and supplies stayed the same at Bt 2.3 Billion

Leasing of aircraft increased from Bt 1.2 Billion to Bt 1.6 Billion

Flight Operations increased from Bt 9.4 Billion to Bt 11.5 Billion

Depreciation of assets increased from Bt 3.8 Billion to Bt 4.4 Billion

Marketing increased from Bt 730 Million to Bt 850 Million

Insurance decreased from Bt 350 Million to Bt 114 Million

Pay to board of Director decreased from Bt 4.6 Million to Bt 2 Million

Other operating expenses increased from Bt 1.3 Billion to Bt 1.6 Billion

Giving a total expense increase from Bt 41.1 Billion to Bt 44.4 Billion

Total Profits decreased from Bt 959,396,459 to Bt 113,795,430

Source: SET

tut tut! Surely you know the posting of financial facts on TV is frowned upon by those who prefer to make sweeping statements (or guesses) on the cause of a Thai companies increase or decrease in profits.

And your point is?

The flag carrier of Thailand is economically declining, with increasing arrivals (according to TAT). Add to that their soon to be outdated fleet, and the incapability of operating newer planes like the 380, and you don't see a red flag. As a vise man once said: your millage may vary.

Then again, if your main concern is the not Thai people, and you have the means to pay your way, you shouldn't give a hoot.

PS!

Also take into consideration all the jobs lost in the airline industry as a direct consequence of this.