Bangkok Post – Airline results buoyed by arrival, fare hikes

Thai AirAsia posts B3.4bn profit in Q3

International arrivals helped drive the operating results of Thai carriers despite the third quarter coinciding with the low season, but smaller fleets still pressure the aviation industry, resulting in consistently high airfares.

Santisuk Klongchaiya, chief executive of Asia Aviation and Thai AirAsia, said Thai AirAsia returned to a net profit of 3.4 billion baht in the third quarter this year, up from a net loss of 1.69 billion year-on-year.

He said the uptick was mainly attributed to foreign passengers and soaring airfares, which averaged 1,847 baht for a single trip, up 7% year-on-year.

Though it was the low season, foreign arrivals to Thailand for the quarter increased to 8.6 million from 7.1 million year-on-year, with 40% coming from China, Malaysia and India.

Mr Santisuk said the airline recorded 7% growth in passenger numbers to 4.9 million, with an average load factor of 90% thanks to an expanded fleet size of 59 aircraft, five more than last year.

In the domestic market, Thai AirAsia survived the off-peak season and massive floods by launching new routes with high demand, such as Suvarnabhumi-Hat Yai and Don Mueang-Lampang, helping the airline maintain the largest share of the market at 39% with a 93% load factor.

In terms of international flights, the airline benefited from pivoting to high-yield routes serving Beijing and Shanghai in China, as well as banking on fifth freedom rights to fly from Taiwan to Japan, he said.

Fifth freedom flights are international routes that neither start nor end in the operating airline’s home country.

Mr Santisuk said as demand grows, smaller fleets would continue to affect airfares as Thai AirAsia saw its revenue per available seat kilometre rise 12% to 1.82 baht year on year, while the airline also streamlined operational costs and increased the utilisation rate.

Other factors that supported the third-quarter results included lower oil prices and a strong baht, which subsequently weakened in the fourth quarter, he said.

Puttipong Prasarttong-Osoth, president of Bangkok Airways, said the airline also benefited from an increase in the number of arrivals in the third quarter as it carried 1.06 million passengers, rising 8.2% year-on-year, with the load factor reaching 79%.

He said the robust demand derived from flights to Samui as the island enjoyed its high season in the third quarter, unlike other tourism destinations in Thailand.

Bangkok Airways recorded revenue of 6.48 billion baht in the third quarter, increasing 15.3% year-on-year, while recording a net profit of 673 million baht.

Mr Puttipong said the average increase in airfare by 10.7% to an industry total of 4.2 billion baht helped improve the carrier’s revenue for the quarter, with ticket sales up 19.2% to 718 million baht.