News
Bangkok Airways and THAI post profit gains but Nok Air’s financial haemorrhaging continues
May 20th 2016
On Monday, Thailand’s flag carrier, Thai Airways International (THAI), announced a 32% year-on-year first-quarter net profit increase, to 5.99 billion baht ($169 million), following more than three years of consecutive record losses. Read More »
Although THAI’s first quarter profit gives hope that the worst is over for the carrier, the result was achieved during the Chinese New Year peak season and was largely due to a 3.6 billion baht, or 25%, drop in fuel costs. THAI’s yield declined another 3.8%, to 2.5 baht, during the period ended March 31, causing concern that a full-year profit might still be elusive in the current financial calendar. THAI CEO, Charamporn Jotikasthira, was equally non-committal during Monday’s announcement and said “the first quarter went according to plan, so the remaining three quarters also should be better than the previous year”.
Bangkok Airways proved once again that it is one of Thailand’s healthiest carriers after the airline posted a solid 45% year-on-year first-quarter profit increase, to 1.57 billion baht ($44.5 million).
The Suvarnabhumi-based airline registered an overall 10.5% increase in passenger numbers in the quarter ended March 31, with load factor up 2.5%, to 74.4%, and yield up 4.5%. The boutique airline attributed the improved performance to “growth in the number of passengers and better average fares together with declining fuel costs”. Overseas sales increased 18.2%, particularly in Singapore, Vietnam, Hong Kong, Myanmar and Taiwan.
Bangkok Airways, under the leadership of president and medical doctor, Puttipong Prasarttong-Osoth, benefits from passenger feed generated by several codeshare agreements with long-haul carriers, most notably Emirates Airline, Qantas Airways and Aeroflot.
At Nok Air the LLC’s first quarter was disappointing with the Don Mueang-based carrier reporting a first quarter net loss of 380 million baht ($10.9 million), a reversal of a net profit of 55.6 million baht. For the three months, Nok’s revenue dropped 2.04% and operating costs surged 10.8% - due to higher leasing and maintenance costs from a recent fleet expansion, the carrier said. Additional pressure came from “domestic low-cost carriers still facing challenges from [local] price wars and over supply” and “frequency cuts as a result of the reduction in pilots”. In February, Nok cancelled hundreds of flights as a result of a pilot walkout at the carrier.
