Political turbulences took their toll on Thai Airways financial performance in first quarter 2014

BANGKOK - Chokchai Panyayong, THAI Acting President, said that during the first quarter 2014, the Thai commercial airline industry was greatly impacted by the country’s ongoing political stand-off and the declaration of a state of emergency for the Bangkok and metropolitan vicinity impacting tourists’ confidence for personal safety, thereby resulting in the decrease in number of inbound and outbound tourists, especially regional tourists.

The political unrest in Bangkok had significant impact on Thai Airways’ operating and financial performance in the first quarter which is normally the high season for tourism travel but the number of inbound and outbound tourists dropped substantially compared to the same period last year by 17 percent, in particular a 27.1 percent reduction in Chinese tourist arrivals, 25.2 percent reduction in Japanese tourist arrivals, 12.9 percent reduction in Korean tourist arrivals, and 27.2 percent reduction in arrivals from ASEAN. Revenue Passenger Kilometers (RPK) decreased by 12.6 percent and Available Seat Kilometers (ASK) decreased by 0.6 percent, which resulted in a cabin factor of 70.1 percent compared to last year’s 79.8 percent cabin factor achieved during the same quarter last year thus lowering operating revenue by 11.6 percent compared to the same period last year.

Thai Airways has adjusted its business plan in order to respond to the operating environment to minimize the impact from the decrease in passenger travel. The Company aims to enhance its revenue and is controlling its cost to improve its financial performance and support its business operations.

During the first quarter of 2014, THAI and its subsidiaries - THAI-Amadeus Southeast Asia Company Ltd, Wingspan Services Company Ltd, THAI Flight Training Company Ltd, Tour Eurng Luang Company Ltd and THAI Smile Airways Company Ltd- posted a loss before foreign currency exchange and income tax (excluding impairment loss of assets and aircraft) of THB 3,287 million when compared to the reported profit of THB 4,271 million last year.

When combined with the impairment loss on assets and aircraft at THB 84 million, there was a decrease of THB 2,284 million compared to last year and a gain on foreign currency exchange of THB 990 million, a decrease of THB 5,139 million compared to last year, THAI and its subsidiaries incurred a net loss of THB 2,619 million during the first quarter of 2014 compared to a net profit of THB 8,295 million earned during the first quarter of 2013.

Sourced: TravelDailyNews