Airline News
Thai carriers report the pain of 2014
March 9th 2015
Thai Airways International (THAI) has posted a wider-than-expected fourth-quarter net loss of 6.4 billion baht ($196 million) for the period ended December 31, 2014, compared with a net loss of 5.7 billion baht in the year-ago period. In 2014, THAI carried 11.2% fewer passengers compared to 2013; its load factor dropped 5.2 points to 68.9%. Read More »
THAI’s latest performance has raised concerns about whether it can turn around quickly while it battles fierce competition and soaring debt, brought about by high operating costs and aircraft purchases in recent years. As one of Thailand's major state companies undergoing reform since the military seized power last May, THAI’s chief, Charamporn Jotikasthira, said he expected the 55-year-old carrier to post further losses this year due to higher rehabilitation costs, which include cutting operating costs and capacity by 20%, selling and retiring up to 44 older aircraft whilst acquiring more efficient new frames, and sending up to a quarter of its 25,000 staff into voluntary early retirement with appropriate severance packages. THAI, 51% owned by the country’s finance ministry, has total debt amounting to $5.9 billion, the highest among Southeast Asian airlines and ranking number 9 among 47 airlines in Asia Pacific, according to Reuters data.
THAI’s budget subsidiary, Nok Air, also bled red ink in 2014. It posted a net loss of 472 million baht for the year, reversing a 1.06 billion profit a year earlier. Nok maintained its load factor at 81%, but RASKs were down 14% for the year. The Don Mueang-based carrier said a main contributor to its 2014 loss was the establishment costs for yet-to-fly long-haul LCC, NokScoot.
Bangkok Airways and Thai AirAsia eked out small profits in 2014. Full-service carrier, Bangkok Airways posted a 351 million baht profit, 62% down year-on-year, while budget airline, Thai AirAsia, slipped 82% to 183 million baht.
