Airlines shrug off  temporary turbulence 

Corporate November 17, 2017 01:00

By SOMLUCK SRIMALEE
THE NATION

AVIATION firms remain confident of a recovery in the last quarter of the year although three of four aviation firms have reported net losses for the first nine months of this year.



Thai Airways International Plc (THAI) reported to the Stock Exchange of Thailand (SET) that in the third quarter of this year, the global aviation industry had expanded due to the recovery of the global economy, which supported more passenger demand and is corroborated by the high cabin factor figures. 

The International Air Transport Association (IATA) data during the nine months of 2017 showed an average cabin factor of 81.7 per cent, a 7.7-per-cent increase over the 6.4 per cent last year.

Meanwhile, freight continued to show signs of improvement from last year in almost all areas. Recovery in emerging markets such as India, China and Asean-5 meant an increase in the freight load factor from last year’s 42.2 per cent to 44.4 per cent.

Thailand’s aviation industry saw steady progress in the third quarter after the country resolved issues over civil aviation. From September 20-27, the International Civil Aviation Organisation (ICAO) repeatedly re-examined Thai aviation standards. There were no further objections regarding safety and other concerns, which led to the removal of the red flag on October 6.

The removal of the red flag is expected to give Thai aviation and the tourism industry a big boost in terms of credibility of the Thai authorities besides removing doubts in the minds of tourists selecting Thai carriers. This might also influence the FAA upgrading the Thai aviation standard from Category 2, which prohibits the opening of new routes in the United States to Category 1.

THAI and its subsidiaries’ reported an operating profit of Bt739 million in the third quarter of this year, compared to the Bt836 million loss last year. Total revenue was Bt46.92 billion, a 6.30-per-cent increase year on year due to an increase in passengers and excess baggage revenue of Bt2.47 billion (6.9 per cent). Passenger traffic increased by 14.9 per cent despite a drop in average passenger yield by 7.5 per cent due to intense price competition. 

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However, the company reported a net loss of Bt3.87 billion in the first nine months of this year. The company said this was because of an increase in fuel expenses following a hike with fuel price. 

Bangkok Airways Plc’s president Puttipong Prasarttong-Osoth said yesterday that the airline had recorded total revenue of Bt20.25 billion and profit before income tax was Bt56.8 million. However, net loss was Bt142.53 million. 

Puttipong added that the average passenger load factor for the third quarter was 69.4 per cent. Passenger yield per revenue passenger kilometres was Bt4.33, down 10.1 per cent in the third quarter of 2016, due to the increase in the number of service providers on its routes. Nonetheless, the number of Bangkok Airways passengers increased by 6.9 per cent in the third quarter. 

Asia Aviation Plc reported net income of Bt260.9 million, down 34 per cent from the Bt396.6 million in same period of last year. The airline attributed this to increased fuel cost, including the Kingdom’s excise tax on jet fuel price for domestic flights. Also, average fares were down by 7 per cent from the third quarter of last year due to severe competition.

Nok Airlines Plc reported a net comprehensive loss of Bt652.73 million in the third quarter of the year, compared to Bt1.07 billion in the same quarter last year. The parent company accounted for Bt683.54 million of the loss, but profit from non-controlling interests amounted to Bt30.81 million. 

All four aviation companies expressed confidence in improving their performance in the last quarter of this year, riding on the global economic recovery and Thailand’s own expected growth of 3-4 per cent, while the number of tourists visiting Thailand continued to see strong growth.