THAI profits surge almost 500%
Thai Airways International (THAI) has bucked the industry trend by reporting a significant rise in profits for the first quarter of 2012.
While other carriers around the region have seen their profits sink in 2012 – mainly due to high oil prices – THAI reported that its net profits for Q1 2012 jumped 490% to THB3.65 billion (US$110.7 million), compared with THB618 million in the same period last year.
The company’s revenues increased just 5.1% in the same period, reaching THB54.51 billion, but THAI said the increased profitability was due to the company’s cost-cutting strategy, as well as operational changes including the adjustment of flight schedules and aircraft deployment to better match passenger demand. It also introduced new secondary routes to offer connections to its regional and intercontinental flights. This contribution is likely to be enhanced by the launch of THAI’s new regional low-cost subsidiary, THAI Smile, later in the year.
A major cause behind the surging profits however, was a THB527 million gain on foreign currency exchange.
The airline’s passenger fare structure was also adjusted “for suitability to the market, based on economic conditions”, according to THAI. It warned however, that “high fuel prices and fierce competition” continued to affect operations.
In the first quarter of 2012, THAI carried a total of 5.16 million passengers, an increase of 4.8% year-on-year, while average cabin load factors climbed from 76.0% to 78.2%.