Thai Airways International remains optimistic that its 2010 financial performance will be better than last year's, despite the recent political turbulence that cost the airline Bt6 billion in lost revenue.
THAI president Piyasvasti Amranand yesterday attributed the resilience to the company's restructuring measures, which have been in place for nine months.
"The political turmoil brought about the greatest impact on THAI, even compared with The tsunami and the Sars outbreak. Yet, we have experienced a rebound, faster than expected, as the cabin factor has moved up to the nearnormal level of 75 per cent as of July 18, while the cargo load factor has also risen to 60-70 per cent," he told a press conference.
THAI last year posted Bt7.3 billion in net profit, against a sharp loss of Bt21 billion in the previous year.
This year, in the first quarter, the national carrier's net profit was Bt10.7 billion, up 36.2 per cent year on year, on the back of a 20.7percent increase in revenue to Bt49.8 billion. It has not yet reported second quarter results.
Following a Bt8billion term loan from Siam Commercial Bank, Piyasvasti said the company's capital increase should follow by the end of this quarter.
The president said the aviation industry was particularly sensitive to epidemics, disasters, political turbulence and economic downturns, to which all carriers had to adjust.
The airline, which earlier catered to 70 per cent of visitors to Thailand, has had to rearrange its routing plan and focus more on connecting flights, he added.
Since last November, THAI has come under the "Mission TG100" restructuring programme for business sustainability over the next 50 years. Highlights of the plan include costcutting, fleet upgrades, improvement in services, and internal restructuring for higher efficiency.
"The hardest part, which is the key of the mission, involves a change in attitude and corporate culture not supportive to operations. So far, executives - as guidŽed by their own key performance indexes - and employees have shown full cooperation," Piyasvasti said.
Under the various costreduction plans, non-fuel costs were cut by Bt12.78 billion last year, or 13.1 per cent. Employeerelated costs have been reduced by Bt4.34 billion, while flight operation costs have been lowered by Bt2.25 billion. All business units are encouraged to generate more income to become financially independent.
"We aim to reduce costs by another Bt20 billion during 2010-2012. So far this year, we have been able to cut costs by Bt3 billion," he said.
To renew the fleet, THAI's board approved the acquisition of seven Airbus A330-300s and eight Boeing B777-300ERs, which will be gradually delivered over the next three years. Another six Airbus A380-800s will be delivered in 2012 and 2013.
Cabin, seats and inflight entertainment on 20 aircraft are being improved under a Bt5.6billion budget.