Higher fuel prices, fierce rivalry hit airlines' Q1 financial results

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Higher fuel prices, fierce rivalry hit airlines' Q1 financial results
By SOMLUCK SRIMALEE
THE NATION

 

 

BANGKOK: -- RISING oil prices and high competition had an impact on the financial results of aviation companies in the first quarter, with some reporting slight growth but others reporting declines in revenue and net profit compared with the same period last year. 

 

Thai Airways International (THAI) recorded revenue of Bt49.8 billion and net profit of Bt3.16 billion, down by 0.8 and 47.3 per cent respectively from the first quarter of last year.

 

Bangkok Airways reported revenue of Bt7.46 billion and net profit of Bt565 million, down 3.9 and 64.1 per cent respectively year on year.

 

Asia Aviation, operator of Thai AirAsia, reported a 2-per-cent improvement in revenue to Bt9.15 billion. However, net profit was only Bt570.3 million, down 43 per cent from the same quarter last year.

 

Nok Airlines reported first-quarter revenue of Bt4.08 billion, up 20.88 per cent, but nevertheless recorded a net loss of Bt294.07 million. Still, that was an improvement over its net loss of Bt379.41 million in the first quarter of 2016.

 

THAI acting president Usanee Sangsingkeo said the company’s financial results for the first quarter were lower than for the same period of last year partly because the price of jet fuel was significantly higher. Meanwhile, passenger income dropped by 12 per cent year on year as the market faced high competition, as other airlines lured customers with lower fares. 

 

However, THAI is entering the third phase of its sustainability programme by launching new routes to boost its income, and also managing its costs to boost its net profit this year, she said.

 

Bangkok Airways president Puttipong Prasarttong-Osoth said that although the company’s revenue and net profit in the first quarter were lower than in the same period last year because of rising costs and heavy competition, its passenger numbers rose by 2.7 per cent. 

 

Furthermore, the company’s airport-related businesses grew from the same period of 2016 by 11.9 per cent, which was mainly derived from 14.4-per-cent growth in the revenue of Bangkok Air Catering. The increased revenue was derived from additional airline customers. 

 

For Bangkok Airways’ ground services, revenue grew by 10.4 per cent, while the number of flights grew by 9.7 per cent compared with the same period of 2016.

 

Asia Aviation reported to the Stock Exchange of Thailand that the decline in its net profit in the first quarter from the same period last year resulted from the increase in global oil prices and the increase in Thailand’s excise tax on jet fuel for domestic flights since late January. 

 

Meanwhile, average fares rebounded by 11 per cent from the previous quarter thanks to continuing growth in tourism.

 

The number of international tourists coming to Thailand from January to March rose by 2 per cent over the same period last year to 9.2 million. This was in spite of the fact that the number of visitors from China, Thailand’s major source of tourists, declined by 7 per cent from the first quarter of last year because of strict government measures regulating tour operators.

 

Meanwhile, the number of European visitors grew by 6 per cent over the same period last year. Visits from other regions also continued to grow compared with the same period last year, Asia Aviation reported to the SET recently. 

 

Source: http://www.nationmultimedia.com/news/business/corporate/30315409

 

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