Summary
- Thai Airways sees positive revenue growth in 1Q24, with passenger revenues up 10% despite selling aircraft and reducing fleet size.
- Operating expenses increased by 22.5% in 1Q24, leading to a 15% drop in operating profit, and a net profit decrease of 81% compared to 1Q 2023.
- Thai Airways plans to expand with new aircraft deliveries in Q2, resume flights to Milan and Oslo, and retrofit cabin seats with new features.
In a week of airline failures, it is heartening news to hear that one of Asia’s legacy carriers, Thai Airways, is moving closer to exiting its financial restructuring regime. After filing for bankruptcy protection in 2020, the airline turned its fortunes around and continued that in the first quarter of 2024, with revenues climbing by 10% year-on-year.
A financial rebirth in 2024
On Friday, Thai Airways said it expects to meet its obligations and complete the capital restructuring this year, according to the Plan amendment approved by the Central Bankruptcy Court in October 2022. The group added that it aims to restore positive equity in 2024 so that its securities can resume trading on the stock market, creating confidence among creditors, existing shareholders, and investors in the airline group.
Photo: Komenton | Shutterstock
For the three months ended March 31, 2024, Thai Airways International Public Company (Thai) and its subsidiaries increased total year-on-year (YoY) revenue by 11% to 45.95 billion baht ($1.25b), while passenger revenues climbed by 10%. In announcing its first-quarter results (1Q24) on Friday, the airline said the gain came from increased passenger traffic and route expansion due to the arrival of three Airbus A350 widebody aircraft.
The additional Airbus A350s also brought increased operating efficiencies and allowed the airline to increase frequencies on popular routes to Hong Kong, Singapore, Taipei, Manila, Kathmandu, Tokyo Narita and Sydney. Thai also resumed services to the West Australian capital, Perth and to Colombo, Sri Lanka, from the end of March and introduced a new service from Bangkok to Istanbul, Turkey.
Photo: PANUMAS PIX | Shutterstock
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The airline also sold two Airbus A340-600s and one Boeing 747-400, reporting that its fleet numbered 74 aircraft at the end of 1Q24, compared to 86 at the same time last year. In line with its reorganization, Thai completed restructuring its aviation business group by receiving the final four Airbus A320-200 aircraft from Thai Smile in January 2024.
Thai also added domestic services to Chiang Rai, Khon Kaen, Ubon Ratchathani, Krabi, Hat Yai and Narathiwat, although the latter route was suspended on March 31, 2024. The group carried 3.88 million passengers and now serves 59 destinations in 24 countries, with eight domestic destinations.
More capacity with more aircraft coming
In 1Q, Thai increased both available seat kilometers (ASKs) and revenue passenger kilometers (RPKs) by 10.1%, producing a creditable load factor of 83.5%. Total operating expenses surged by 22.5% due to increased flying, aircraft maintenance, ground service fees and other non-fuel expenses, plus the depreciation of the Thai Baht.
Photo: KITTIKUN YOKSAP | Shutterstock
Operating profit fell by 15% YoY to 11 billion baht ($300.5m), and after finance and one-time expenses, a net profit of 2.42 billion baht ($66.1m), a decrease of 81% compared to the first quarter of 2023. This was significantly affected by gains made last year from restructuring expenses and foreign exchange rates.
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Looking ahead, Thai said it will take delivery of three Airbus A350-900s and one Boeing 787-9 in the second quarter, allowing it to resume flights to Milan and Oslo and start a new route to Kochi (India). Thai is also planning to retrofit the cabin seats of Airbus A320-200 aircraft with the new Royal Silk reclining seats this year and introduce a wireless inflight entertainment system. The airline also has a firm order with Boeing to acquire 45 Boeing 787 Dreamliners with an option for up to 80, with deliveries from 2027 to 2033.
Have you flown with Thai Airways lately? Let us know in the comments.