Thai Airways International Public Company Limited (THAI) and its subsidiaries announced an operating profit of THB 4,071 million (412.2% better than the same period last year) after deduction of maintenance provision for operating lease aircraft, special expense related to the transformation plan, and impairment loss of assets and aircraft. The total amount of these items was THB 6,173 million while gain on foreign currency exchange was THB 685 million resulting in a net profit of THB 47 million, which was an improvement from the THB 13,047 million loss in the same period last year.
Mrs. Usanee Sangsingkeo, THAI Executive Vice President of Aviation Business Unit, and Acting President, said that THAI continued to implement its second phase of the transformation plan “Strength Building” in 2016 by embarking on four main strategies: 1.) generating aggressive revenue, 2.) reducing cost and increasing efficiencies, 3.) building capabilities for sustainable growth, and 4.) creating excellent quality of service. THAI implemented these tasks by using information technology with international standards to enhance revenue management and to implement its new business class service, to launch new routes: Bangkok-Tehran, Iran, Phuket-Frankfurt, to resume the Bangkok-Moscow route, to add flight frequencies in Europe, and continuation of last year’s MSP program.
Furthermore, THAI adjusted its fleet strategy by taking delivery of 2 Airbus A350-900XWB aircraft that primarily operate on intercontinental routes while it decommissioned 2 Boeing 777-200 operating lease aircraft on 31 December 2016 with 95 aircraft remaining in the fleet, which is the same amount as the end of the previous year but with improved aircraft utilization. Consequently, product traffic (ASK) of THAI and its subsidiaries increased by 1.9% while passenger traffic (RPK) increased by 2.5%. The average cabin factor was 73.4% higher than last year which was 72.9% with 22.3 million passengers carried, representing a 4.8% increase from last year.
As a result of development in various areas based on the strategic plan and satisfactory success of the organization’s transformation, there was an overall improvement in customer satisfaction evident from various awards that the Company received. In addition, the financial performance in 2016 of THAI and its subsidiaries showed an operating profit of THB 4,071 million compared to last year’s loss of THB 1,304 million or 412.2%, a vast improvement from last year mainly because total expense decreased by 7.1% from the decrease in fuel expense by THB 17,907 million (28.3%) resulting from the jet fuel prices that dropped by 21.6% and improved fuel risk management, net finance cost reduced by THB 431 million (7.7%) due to efficient cash management and financial restructure, while non-fuel operating expense increased by THB 4,773 million (3.9%) mostly due to increase in maintenance and overhaul expenses. Total revenue decreased by THB 8,190 million (4.3%). Passenger and excess baggage revenue reduced by THB 4,428 million (2.9%) due to fuel surcharge adjustment while other revenue reduced by THB 3,775 million since last year, the main reason being that last year THAI received insurance compensation from the delayed delivery of economy class seats at the amount of THB 3,968 million.
In 2016, THAI and its subsidiaries had a one-time cost item that resulted from aircraft maintenance based on actual conditions of aircraft and maintenance contractual obligations of THB 1,317 million, transformation plan expenses of THB 1,228 million, and impairment loss of assets and aircraft of THB 3,628 million but had a THB 685 million gain on foreign currency exchange. Consequently, THAI and its subsidiaries reported a net profit of THB 47 million. Profit attributable to owners of the parent amounted to THB 15 million. Profit per share was THB 0.01 or 100.2% higher than last year’s loss per share of THB 5.99.
As of 31 December 2016, total assets were THB 283,124 million, a decrease of THB 19,347 million (6.4%) from 31 December 2015, mainly due to short-term and long-term repayment, additional provision of impairment of aircraft and aircraft sold during the year. Total liabilities as of 31 December 2016 totaled THB 249,536 million, a decrease of THB 20,009 million (7.4%) from 31 December 2015. Total shareholders’ equity amounted to THB 33,588 million, an increase of THB 662 million (2.0%).