News
THAI reports best load factor in a decade but losses deepen
March 2nd 2018
Thai Airways International (THAI) is still up against it. Read More » The flag carrier once again lost ground to the competition in 2017.
The Star Alliance founding member has reported an operating profit of THB2,856 million (US$91 million) for the year ended December 31, a decrease of 29.8% compared to the previous year. The airline blamed a 24.2% increase in jet fuel prices and a 7.7% yield slippage, “due to heavy competition”, for its worsened performance.
Following the deduction of one-time expenses, mainly from the impairment of assets and aircraft, as well as foreign currency exchange losses, THAI and its subsidiaries reported a net loss of THB 2,072 million.
In better news for the airline, THAI’s load factor improved 5.8% during the year, to 79.2%, the best result in more than a decade.
THAI also carried 10.3% more passengers in 2017 vis-à-vis the previous year, for a total of 24.6 million. Moreover, its fleet utilization improved from 11.5 to 12 hours a day; ASKs grew 6.4% and RPKs increased 14.7%.
The Suvarnabhumi Airport-based carrier also grew its fleet. In 2017, it added seven new aircraft (five A350-900s and two B787-9s), while it decommissioned two on-lease A330-300s. Its fleet now totals 100 aircraft. The airline is due to place a widebody order for approximately 17 aircraft this year.
Last year, THAI was forced to ground its fleet of six B787-8s because of Rolls-Royce TRENT 1000 turbine blade issues. Flights had to be cancelled and schedules rejigged. The airline said this “resulted in increased cost and revenue loss” and thus it was “in the process of negotiating compensation” with the engine maker.
The carrier added Vienna to its route map in 2017 and will increase the frequency on the route from four- to five-weekly starting April, whilst replacing the B777-300ER with the smaller B787-8. In the interim, on Thursday, THAI terminated its Bangkok-Tehran B777-200ER service, approximately 18 months after launching the route. In October, the airline told Orient Aviation it was considering adding flights to Seattle.
Commenting on the results, Flt. Lt. Kanok Thongpurk, THAI executive vice president for legal management and general administration, said the airline was currently in the third phase of its “Sustainable Growth” turnaround plan. The third phase hopes to address a) developing a competitive flight network, increasing profitability and reducing the complexity of its fleet; b) increasing competitiveness and revenues; c) creating “excellent service”; d) improving cost and operational efficiencies; e) building a sustainable corporate culture by addressing human resource deficiencies; and f) finding new business development opportunities.
