Back in black, THAI eyes good Q2

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OUTLOOK
Back in black, THAI eyes good Q2
Suchat Sritama
The Nation


Charamporn Jotikasthira

BANGKOK: -- Thai Airways International sees bright prospects for air travel this quarter thanks to the weaker baht, but says it needs to continue reducing operating costs to maintain profit growth.

The airline returned to profitability in the first quarter, netting Bt4.54 billion, after drops in global oil prices, economic recovery in some parts of the world and its cancellation of loss-making routes.

The company suffered a net loss of Bt2.634 billion in the first quarter of last year.

Recent drops in global oil prices have led to more business operations, prompting higher demand for air travel. The US economy is beginning to expand in light of stronger fundamentals, while the European economy shows signs of strengthening with low interest rates and a weakening euro.

Charamporn Jotikasthira, president of THAI, said the carrier should see a good second quarter after depreciation of the Thai currency encourages foreigners to travel to this country, especially from China. The airline is yet to see significant bookings from overseas as it is currently the low season, but expects more inbound arrivals soon.

He said the results for the second quarter would depend on how THAI could reduce operating costs, targeting cuts of 10-20 per cent in each department. One of the packages is an early-retirement scheme with a budget of Bt5.5 billion to cut its workforce by about 1,800.

In the first quarter of this year, THAI also proceeded with the first phase of its "Stop the Bleeding" reform plan to cancel loss-making routes. These included the Bangkok-Johannesburg route, which ceased in the middle of January, and the Bangkok-Moscow and Phuket-Seoul routes, which were stopped on March 29.

Under the fleet-adjustment strategy, 11 aircraft were decommissioned and two decommissioned planes were sold. THAI received two new planes. As of March 31, the company's fleet totalled 93 aircraft.

As Thailand's tourism sector began to recover, several countries enjoyed some economic growth and the airline made efficiency improvements, THAI served 5.62 million passengers in the first quarter, up 17 per cent from the same period last year. Its cabin factor averaged 75.4 per cent, up from 70.1 per cent a year earlier.

On a consolidated basis, THAI booked Bt4.415 billion in earnings before taxes and exchange-rate and asset impairment in the quarter, compared with a loss of Bt3.29 billion in the first three months of last year.

The company cited a 3.4-per-cent increase in income from sales or services and an 11.6-per-cent decline in total expenses after a decrease in average oil prices for its return to profitability.

THAI also enjoyed Bt9.65 billion in foreign-exchange gains in the quarter, up from a Bt8.66-billion gain for the same period of last year. However, its losses from aircraft-asset impairment inched up from Bt11.72 billion to Bt11.80 billion.

In the first quarter of this year, the company, on the consolidated basis, posted a net profit of Bt4.549 billion, compared with a net loss of Bt2.619 billion in the same period a year earlier.

THAI and its subsidiaries posted Bt10.92 billion in consolidated earnings before interest, tax, depreciation, amortisation and losses from asset impairment (EBITDA), up 236.7 per cent from the same period of last year. Its EBITDA margin was 21.1 per cent, compared with last year’s 6.5 per cent.

Charamporn said the earthquake in Nepal had not affected THAI's operations as the airline continued its daily flights to that country.

Source: http://www.nationmultimedia.com/business/Back-in-black-THAI-eyes-good-Q2-30259939.html


-- The Nation 2015-05-13

[ExPratt]

"In the first quarter of this year, THAI also proceeded with the first phase of its "Stop the Bleeding" reform plan to cancel loss-making routes. These included the Bangkok-Johannesburg route, which ceased in the middle of January, and the Bangkok-Moscow and Phuket-Seoul routes, which were stopped on March 29."

I read a couple of weeks ago they are also cutting down to 1 flight a day To/From LHR

[BSJ]

One Quarter of profit...whoopy do! Tell me what the accumulated deficit is at the moment? How much have the people of Thailand put in to keep the airline afloat all these years?

[jamesjohnsonthird]

Do the Thai shareholders knows that $5 million dollars a year go missing?

A certain Hi-So gets free maintenance on his private jet.

A jet he got from the taxpayers.

The fox is guarding the henhouse in Thailand.

[ExPratt]

Do they still have an Audit to pass along with other Thai registered airlines. Seems strange if are cutting 10-20 % costs from each department as mentioned in the article

Edited May 12, 2015 by ExPratt

[NongKhaiKid]

In the black already ? That was fast or having they been getting advice on presenting figures from TAT ?

[jamesjohnsonthird]

 

Do they still have an Audit to pass along with other Thai registered airlines. Seems strange if are cutting 10-20 % costs from each department as mentioned in the article

 

Auditors discovered the missing $5 million but were told to ignore it.

Some very Thai Hi-So are raping Thai Airlines and the other 56 State run companies.

Funny, the General is obsessed with protecting this family.

[ExPratt]

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Do they still have an Audit to pass along with other Thai registered airlines. Seems strange if are cutting 10-20 % costs from each department as mentioned in the article

 

Auditors discovered the missing $5 million but were told to ignore it.
Some very Thai Hi-So are raping Thai Airlines and the other 56 State run companies.
Funny, the General is obsessed with protecting this family.

Apparently the audit if of Thai Charter flights and airlines

"Regarding the forthcoming audit of the safety standards of Thai chartered filight operators by International Civil Aviation Organisation, the Thai Civil Aviation Department has notified 16 Thai chartered airlines for a discussion in June prior to the arrival of ICAO officials."

[bangon04]

"Charamporn said the earthquake in Nepal had not affected THAI's operations as the airline continued its daily flights to that country."

Amazing efficiency.... so THAI. And where exactly do they land while Kathmandu airport is closed?

[MobileContent]

Can those numbers been downloaded from the Internet from a reliable source. It sounds to me that some kind of secret funds have been dumped into THAI. I just don't believe it.

[MobileContent]

"Charamporn said the earthquake in Nepal had not affected THAI's operations as the airline continued its daily flights to that country."

Amazing efficiency.... so THAI. And where exactly do they land while Kathmandu airport is closed?

TG319 flies still to Kathmandu

[Songhua]

In the black already ? That was fast or having they been getting advice on presenting figures from TAT ?

Quite a turnaround! There must be some real whiz kids over there at THAI.

[Bangkok Barry]

"In the first quarter of this year, THAI also proceeded with the first phase of its "Stop the Bleeding" reform plan to cancel loss-making routes. These included the Bangkok-Johannesburg route, which ceased in the middle of January, and the Bangkok-Moscow and Phuket-Seoul routes, which were stopped on March 29."

I read a couple of weeks ago they are also cutting down to 1 flight a day To/From LHR

I believe it's because they are changing from the 747 to a 380. Makes sense. I've never understood why THAI have, for as long as I can remember, used its oldest aircraft on one of is most competitive routes. Thai logic at its finest.

[hugh2121]

I see they don't mention fuel costing them more as it's priced in $. Also landing fees and catering abroad will have to be paid in foreign currency. Spares for Airbus in Euros and for Boeing in $. These will all dent their new "profits".

[NongKhaiKid]

In the black already ? That was fast or having they been getting advice on presenting figures from TAT ?

Quite a turnaround! There must be some real whiz kids over there at THAI.

With all the stories of waste, misuse and freebies etc. there's little wonder they don't bring in experts from overseas as they would be all over it and wouldn't last long since they wouldn't be able to understand the Thainess of why such conditions need to exist and just can't be stopped.

[baboon]

"In the first quarter of this year, THAI also proceeded with the first phase of its "Stop the Bleeding" reform plan to cancel loss-making routes. These included the Bangkok-Johannesburg route, which ceased in the middle of January, and the Bangkok-Moscow and Phuket-Seoul routes, which were stopped on March 29."

I read a couple of weeks ago they are also cutting down to 1 flight a day To/From LHR

I believe it's because they are changing from the 747 to a 380. Makes sense. I've never understood why THAI have, for as long as I can remember, used its oldest aircraft on one of is most competitive routes. Thai logic at its finest.

At £1000 a throw for a ticket, I am surprised they are not operating a 737..

[Strangebrew]

I smell paper burning bet someone is cooking the books.

[sawadee1947]

well, probably the asked NOSTRADAMUS.....

[Stargeezr]

I have enjoyed the Thai Air service on some flights with that airline in the past, and have to say

it is much better than the service I receive on any AIr Canada flights that operate to

Thailand. I do hope the airline will willing get rid of the corrupt Hi so with the private jet,

no matter who he or she is. It does seem that there are many ways in which almost any airline

can be corrupt, but I hope the thought of cutting maintenance to the jets are not one of them.

One way to save lots of money in any airline around the world is to cut out some of the

top level managers, and even have a CEO that does not need multi million baht per year,

just to call him or her self the CEO of Thai Air or any other airline. Most businesses around the world

have way too many people in places where they do not need to be, especially in management

I just bet that won't happen though!