THAI reports second quarter net loss

Economy August 15, 2012 00:00

By The Nation

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Thai Airways International has reported a secondquarter net loss of Bt1.46 billion, an improvement over the Bt7.87 billion loss in the corresponding period last year but weaker than the previous quarter due to higher expenses.

The consolidated operating loss of Bt2.7 billion was attributable to the promotion campaign designed specifically for the low season period when passenger's demands diminish, according to the company's statement

Also, the remainder of the special fare tickets issued in late 2011 to stimulate more passenger traffic after the massive flood and valid until June 2012 were utilised during this quarter.
Various expenses were paid out during this quarter, including the retrospective annual salary increment, which had been pending for adjustment since January 2012 and retrospective license allowance for pilots, pending for adjustment since June 2011.
In the previous quarter, the airline showed the operating profit of Bt3.34 billion. It also booked a foreign exchange loss of Bt2.27 billion, against forex gain of Bt1.3 billion in the same quarter this year.
For the first half of this year, it showed the net profit of Bt2.2 billion, against net loss of Bt7.3 billion in the same period last year.
“When compared to the same period last year, THAI's cabin factor indicated an excellent result for the low season period. Unfortunately, THAI was still subject to the unfavourable world economic situation and intensified competition, which constrains the airline from increasing prices”
"When compared to the same period last year, THAI’s cabin factor indicated an excellent cabin factor result for the low season period. Unfortunately, THAI was still subjected to unfavorable world economic situation, intensified competition, which is the constraint for THAI facing difficulty to increase the selling price.
Simultaneously, fuel prices were still high although THAI’s fuel hedging strategy indicated satisfactory outcome. THAI has constantly implemented its cost reduction programme which could reduce expenses, but repairs to the runway of Suvarnabhumi Airport in June 2012 caused flight delays and increased expenses.

Finally, the results of operations could not turn positive, which was the same as during other low season periods in previous years. However, the operating profit (loss) margin for the second quarter over the past five years indicated the improvement trend due to the decreasing loss," said Chokchai Panyayong, Executive Vice President of Strategy & Business Development and Acting for President.