TUESDAY, April 16, 2024

THAI achieves big revenue boost, sets target to trade on exchange

THAI achieves big revenue boost, sets target to trade on exchange

Thai Airways International (THAI) is making a firm pledge to exit its rehabilitation plan as scheduled, and has set a target of trading on the country's stock exchange in the first half of 2025, said Piyasvasti Amranand, chairman of the airline’s debt rehabilitation administrator, on Friday.

His commitment follows the airline’s recorded operational performance in 2023, which saw total revenue, excluding one-time transactions, of 161,067 million baht, 53.3% higher than in 2022.

Emphasising that the majority of its revenue comes from its core business, which is passengers, rather than selling assets, the scenario allows the airline to begin a strategic plan to adjust its capital structure through a debt-to-equity swap later this year.

According to the plan, THAI would complete its capital restructure by the end of this year, exit the debt rehabilitation plan, and file for stock market trading in the second quarter of 2025.

Meanwhile, the airline will start paying the remaining 400 million baht in ticket debt to passengers in March as its operational revenue increases.

Piyasvasti Amranand

Piyasvast said the success is due to the airline employees’ efforts at all levels to steadfastly follow the board strategy, and that the airline’s recovery at this time was done without any government assistance or use the people’s taxes. 

"Thankfully, because we did not receive any government support, it put pressure on us to seriously transform ourselves and to come back stronger within the aviation industry amid higher competition,” he said. 

THAI and its subsidiaries for the fiscal year ending December 31, 2023 achieved a revenue boost primarily due to a 79.3% increase in passenger services. 

Total revenue in 2023 was 87% higher than in 2019, prior to the pandemic. Total expenses, excluding one-time transactions, totaled 120,856 million baht, a 24.3% increase over the previous year. These were primarily due to variable expenses such as fuel prices, which accounted for 39.5% of total expenses, and the cost of transportation services as a result of increased production. 

Meanwhile, operating profit (EBIT) was 40.211 billion baht, a 32.414 billion baht increase from 2022. After deducting aircraft lease payments, earnings before interest, taxes, depreciation, and amortisation (EBITDA) were 42.875 billion baht, which exceeded the rehabilitation plan’s projection. 

“One of the four requirements for completion of the rehabilitation plan is to have EBITDA after deducting cash used for aircraft leases of at least 20 billion baht per year,” Piyasvasti pointed out.

Chai Eamsiri

In terms of THAI's next business plan, airline CEO Chai Eamsiri said the company has already laid out a credible roadmap to secure more aircraft in its pipeline for at least the next decade in order to meet the increasing global demand for travel. 

Last week, THAI announced plans to acquire 45 new aircraft to replace decommissioned ones, claiming that it was necessary to replenish THAI’s fleet to match the number of planes in 2013 as well as to serve the government’s ambitious goal of becoming the region’s aviation hub. 

“The process to obtain new aircraft is very flexible, meaning it can be hire-purchase, leasing or buying depending on the appropriate conditions of THAI at that time,” Chai explained.

Meanwhile, he emphasised that the entire process is conducted directly with the producers, eliminating any potential conflicts of interest.

THAI achieves big revenue boost, sets target to trade on exchange

Furthermore, THAI has scoped the aircraft into 3-4 models rather than the previous 9 models, which will save THAI money, human labour, and maintenance costs when operating the flight. 

THAI and its subsidiaries currently operate a fleet of 70 aircraft, including 50 wide bodies and 20 narrow bodies. In response to rising travel demand, THAI will operate flights to 61 destinations worldwide during the summer flight programme for 2024, increasing flight frequencies on intercontinental and regional routes such as Beijing, Shanghai, and Sydney. New destinations, such as Oslo, Milan, Perth, and Kochi, will be introduced this summer. 

The company is currently expanding its fleet to meet destination and flight plans, as well as customer travel demand, in order to generate revenue and encourage longterm growth.

“THAI will start leasing narrow-bodied Airbus 321 Neo in the fourth quarter of 2025,” THAI CEO reported, adding that the leasing of planes increased THAI’s fleet to 70 last year, and is expected to rise to 79 this year and 90 next year.

The company also plans to increase its market share at Suvarnabhumi International Airport, which dropped from 51.3% to just 27% last year. He expects the margin to reach 35% by the end of the year.