Thai Airways swings to Q3 op­er­at­ing profit

The Gulf Today - Business - - INTERNATIONAL -

BANGKOK: Na­tional car­rier Thai Airways In­ter­na­tional swung to a quar­terly op­er­at­ing profit, but warned com­pe­ti­tion was likely to in­ten­sify af­ter a U.N. body last month re­moved a ban on new in­ter­na­tional flights by Thaibased car­ri­ers.

Low-cost ri­vals Thai Vietjet, Nokscoot and Thai Airasia X have said they plan to add flights to des­ti­na­tions in Asia, in­creas­ing pres­sure on the le­gacy car­rier, which like Sin­ga­pore Air­lines Ltd and Cathay Pa­cific Airways has re­ported fall­ing ticket prices.

Thai Airways, 51 per cent owned by the gov­ern­ment, swung to an op­er­at­ing profit of 739 mil­lion baht ($22.33 mil­lion) for the third quar­ter ended Sept. 30, from a 836 mil­lion baht loss a year ago.

Rev­enue rose 6.3 per cent to 46.9 bil­lion baht as it boosted ca­pac­ity and filled a higher per­cent­age of seats, but re­ported a 7.5 per cent de­cline in av­er­age fares. The air­line said com­pe­ti­tion was likely to in­ten­sify as new routes were opened and the in­dus­try faced short­ages of trained pi­lots, flight at­ten­dants, en­gi­neers and tech­ni­cians.

“The op­er­at­ing en­vi­ron­ment for full-ser­vice car­ri­ers in the Asia re­gion re­mains highly chal­leng­ing, es­pe­cially on in­ter­na­tional routes, given in­tense price com­pe­ti­tion and strong ca­pac­ity ad­di­tions from both low-cost car­ri­ers and other full-ser­vice car­ri­ers,” DBS an­a­lyst Paul Yong said, adding that higher fuel prices also would be a chal­lenge.

Thai Airways’ ex­penses rose 2.7 per cent in the third quar­ter as jet fuel prices spiked and the gov­ern­ment be­gan tax­ing jet fuel for do­mes­tic routes. The air­line’s shares were trad­ing 1.7 per cent lower on Mon­day.

The UN In­ter­na­tional Civil Avi­a­tion Or­ga­ni­za­tion lifted the red flag against Thai­land over safety con­cerns in Oc­to­ber, al­low­ing Thai-based car­ri­ers to add new in­ter­na­tional routes.

Thai Airways on Mon­day said it planned to add fre­quen­cies on flights from its Bangkok hub to Brus­sels, Oslo and Auck­land and to ex­pand South­east Asian routes flown by bud­get arm Thai Smile.

“Thai Airways should fo­cus on prof­itable routes like Ja­pan and pre­mium of­fer­ings,” said Chakrit Puech­pan, ex­ec­u­tive vice pres­i­dent of MFC As­set Man­age­ment, which holds shares in the air­line.

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