Thai Airways International PCL missed estimates with a net loss of B2.11 billion for fiscal 2017, blaming aircraft maintenance, an impairment loss and higher fuel prices.
The airline, which reported a profit of B15.14 million in 2016, missed analysts’ estimates of B2.6bn in profits for 2017.
Thai Airways booked a one-time maintenance item of B550mn with a total of B979mn spent on maintenance, and impairment loss of assets and aircraft of B3.19bn.
The carrier also booked B1.58bn in foreign-exchange losses in 2017, compared with a foreign exchange gains of B685mn in 2016.
Also, average jet fuel price was 24.2% higher than the year before. Asian jet fuel differentials have reached a 10-year high in 2018 as demand has outpaced production.
Total revenue for THAI was up by 6.3% and reached B192bn as the airline carried 24.6mn passengers in 2017, 10.3% more than it did in 2016.
Thai Airways reported a cabin factor – which measures how full its flights were – of 79.2% in 2017, the highest in 10 years and up from 73.4% a year earlier. The Thai aviation industry is expected to expand from tourism and also the removal of the red flag related to safety concerns by the UN International Civil Aviation Organization (ICAO) in October last year.
A separate review by US Federal Aviation Authority is expected to take place mid-2018, which is hoped could open routes to the United States later in the year.
Thai Airways expected to receive five new Airbus A350-900 this year to fly intercontinental and regional routes.
The airline warned that competition from low-cost carriers and upward trend of fuel prices were risks for the year ahead. Thai carriers have been struggling to make the most of a boom in tourism to Thailand, which expects a 6% rise in tourists to 37.55mn this year.
THAI and its subsidiaries reported a net loss of B2.072bn. Loss attributable to owners of the parent amounted to B2.107bn. Loss per share was B0.97 while last year’s profit per share was B0.01.
As of December 31, 2017, total assets were B280.775bn, a decrease of B2.349bn (0.8%) when compared to Dec 31, 2016.
Total liabilities as of Dec 31, 2017 totalled B248.762bn, a decrease of B774bn (0.3%) when compared to Dec 31, 2016.
Total shareholders’ equity amounted to B32.013bn, a decrease of B1,575mn (4.7%) resulting from loss in operating results.
Thai Airways’ low-cost subsidiary Nok Air narrowed losses in 2017 to B1.85bn from a B2.8bn loss a year earlier and plans a turnaround by expanding international routes in China and India.
Andrew J Wood has over 35 years of hospitality and travel experience. A long-time resident of Thailand, he is a former hotel general manager and Immediate Past President of Skal International Thailand. Mr Wood is also a Director of Worldwide Destinations Asia Co Ltd in Bangkok and a regular guest lecturer at various Universities in Thailand including Assumption University’s Hospitality School.