SUNDAY, February 25, 2024

THAI forecasts profit surge on tourism rebound

THAI forecasts profit surge on tourism rebound

Thai Airways International Plc (THAI) expects its operating revenue to rise to 130-140 billion baht this year, up 30% from 105 billion last year, due mainly to a strong tourism recovery and increased demand.

Piyasvasti Amranand, chairman of the committee overseeing the airline's rehabilitation plan, said on Friday that the company was expected to make a net profit of 11.1 billion baht this year, with earnings before interest, taxes, depreciation, and amortisation of 11 billion baht, an increase of 660% from last year.

Surging net profit is a result of the success of the airline’s restructuring plan, Piyasvasti said.

Thailand’s national flag carrier still forecasts operating losses in its subsidiaries, particularly Thai Smile Airways, which lost 4.2 billion baht last year and has a cumulative loss of almost 20 billion baht, Piyasvasti said.

Last year, THAI and its subsidiaries saw available seat kilometres – a measure of an airline’s carrying capacity to generate revenue – jump 243%, while revenue passenger kilometres – a way of calculating the number of kilometres travelled by paying customers – surged 1,118%.

Their cabin factor last year was an average of 67.9%, up from 19.1% in 2021. The number of passengers totalled 9 million last year, up 449% from a year ago.

THAI and its subsidiaries have a total of 64 planes, serving 39 routes to Europe, Asia, and Australia. Most of their flights are between Bangkok and other Asian cities in Japan, China, India, South Korea, and Singapore.

THAI forecasts profit surge on tourism rebound

Piyasvasti said the planned merger between THAI and Thai Smile will take place this year. The merger is part of the national carrier’s rehabilitation plan drafted in June 2021. Their two fleets will operate under a single brand after the merger, he said.

The merger could help Thai Smile reduce its losses while streamlining the operations of both airlines, he added.

Thai Smile’s about 800 staff will not be affected by the merger although the airline’s chief executive and chief financial officer would become redundant, Piyasvasti said.

THAI chief executive Chai Eamsiri said on Friday that the Stock Exchange of Thailand would be informed of any decision on the merger.

Trading of THAI shares has been suspended pending the completion of its rehabilitation plan.

Chai said that the merger between both airlines, with shared routes and planes, was expected to help cut costs by 30% per hour of flight, which would eventually allow Thai Smile to turn a profit.