As it recovers under the Group’s rehabilitation strategy, Thai Airways is the most recent Asian airline to report first-quarter profitability.When Thai Airways revealed a return to profit in the first quarter of 2023 (1Q2023) on Friday, it was just another indication of how effectively Asian airlines are rebounding. With passenger numbers more than three times higher than in the first quarter of 2022, the profit was driven by rising tourism and transit demand.
The numbers appear good on the whole.
Thai Airways International Public Company Limited (THAI), which comprises Thai Smile Airways, transported 3.5 million passengers in the first quarter of 2023, bringing in Baht 41.5 billion ($1.224 billion) in total revenues for the airline company. This came from carrying 3.52 million passengers in 1Q2023, as opposed to 1.02 million during the same period previous year.
This was almost four times what it generated in 1Q2022 at that point.operational costs for THAI in the first quarter came to $840 million, leaving the company with an operational profit before finance costs of $384 million. Gains from the carrier’s restructuring program and the sale of assets, such as a Boeing 747, helped the bottom line, which resulted in a net profit of $369 million as opposed to a deficit of $95.6 million in the first quarter of 2022.Its winter operating schedule, which supported up to 34 destinations, including Europe, Australia, and Asia, the airline claimed, was the cause of the increased demand.
Additionally, THAI increased capacity in the first quarter on its busiest routes to South Korea and Japan. It also benefited somewhat from the return of services to China beginning on March 1. The first-quarter passenger load factor increased dramatically from the first-quarter load factor of 32.5% to 83.5%.
THAI operates in accordance with the terms of its business rehabilitation plan. During the quarter, it sold six Boeing 777-300ER aircraft, and the deal is scheduled to be finalized in April. The airline claimed that the 777-300ERs “were not in the future flight operations plan,” despite the fact that it had reinstated one 777-200ER into service during the first quarter. This airplane travels to Singapore, Kuala Lumpur, Dhaka (Bangladesh), Islamabad (Pakistan), as well as to Kolkata, New Delhi, and Chennai in India as well as Singapore.
At the conclusion of the quarter, THAI had 65 of its 86 aircraft in service, including 20 Airbus A320-200s flown by Thai Smile. Twenty-one aircraft, according to the airline, are in long-term storage, and 16 more have been retired from service and are currently for sale. Fuel expenditures increased more than anticipated due to a 10% year-over-year price rise as total flight hours increased from 30,526 in 1Q2022 to 66,919 this year and an average daily utilization of 12.3 hours per aircraft.
How far is THAI traveling?
Due to the arrival of two Airbus A350-900 aircraft, which are able to accommodate rising demand on routes to China, including those to Kunming, Beijing, Shanghai, and Guangzhou, as well as Melbourne, Australia, the second quarter has been positively impacted. It anticipates that the quarter would see a sharp increase in traffic on flights to China, and that the A350s will “support the upward passenger traffic due to the industry recovery.”
THAI stated in its announcement on Friday that it is moving on with its feasibility study on restructuring THAI and its subsidiaries, including the operation of Thai Smile. With more flights, especially on international routes where there is less competition, it is concentrating on increasing the effectiveness of fleet use and generating income potential from the network.Additionally, the group seeks to “minimize the constraint of short-term aircraft procurement resulting from the continued recovery in aviation business while aircraft manufacturer has limitations in expanding production capacity to meet the rapidly increasing traffic demand.”
