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AVIATION

THAI earning down on lower traffic, higher oil prices

By The Nation

Thai Airways International showed a plunge in first-quarter earnings, due to a surge in fuel expenses and a drop in passenger loading.

According to CIMB Securities (Thailand), the worst is not yet over. "THAI is heading into a softer travelling season while fuel prices should remain a drag on profitability. Competitive pressures both at home and on international routes should limit its ability to pass on higher costs," it said in a research note.

THAI's quarterly core profit fell 36 per cent year on year to Bt3.5 billion, 5 per cent above consensus but 6 per cent below the house's expectation.

The airline said in a statement that jet fuel cost rose 35 per cent on year, while it recorded foreign exchange loss of Bt3.36 billion against the forex gain of Bt5.7 billion in the same period last year. This resulted in the net income of only Bt618 million in the first quarter.

On the contrary, Airports of Thailand Plc was resilient to the slowing aviation traffic in the first quarter. Though airlines suffered from the disasters in Japan, which greatly reduced the number of passengers to and from Japan, AOT in the quarter witnessed higher passenger traffic. At Bt1.6 billion, the core profit rose 13 per cent on year and 86 per cent on quarter.

CIMB has raised the core profit forecasts by 15 per cent for the 2011 fiscal year and by 8 per cent in the next fiscal year due to higher traffic and lower cost assumptions.

-- The Nation 2011-05-16

[givenall]

Not surprise at all about lower passengers. Their planesold, service not very good but their prices are very high like they are firstclass airline. Much to be desired