Thai Airways Reports Mixed Q1 2024 Report

DALLAS — Thai Airways (TG) and its subsidiaries reported mixed results for the first quarter of 2024. Revenue increased significantly due to a rise in passenger traffic, but overall net profit remained negative.

The Bangkok (BKK) based carrier reported a 10.7% increase in total revenue to 45,955 million baht compared to the same period last year. This growth is primarily attributed to a substantial increase in passenger revenue, driven by the resumption of flight services and increased frequencies on popular routes to Europe, Australia, and Japan.

However, TG also experienced a significant rise in total expenses compared to Q1 2023. TG and its subsidiaries reported expenses of 34,880 million baht, 22.5% higher than the previous year’s expense of 28,473 million baht.

This increase is attributed to factors like increased production, traffic, number of flights and routes, higher number of passengers carried, Baht depreciation, ground service fee hikes, and raw material price increases. These factors resulted in higher overall expenses, particularly in passenger handling, flight services, and aircraft maintenance.

Profitability Challenges Remain

Despite the revenue growth, TG reported a net profit of only 2,423 million baht. This figure reflects a decrease in operating profit before financial costs (excluding one-time items) compared to Q1 2023.

In Q1, financial costs, and net one-time items as expenses which included foreign exchange losses, impairment of assets, outdated passenger ticket revenue adjustments, gains on debt restructuring, and gains from investments in other companies.

Positive Developments in Operations

Thai Airways increased its fleet size with eight Airbus A350-900 aircraft, improved capacity utilization with an average aircraft utilization of 12.8 hours per day, and grew its passenger base by 10.2% to 3.88 million.

The average cabin factor remained healthy at 83.5%, exceeding the industry average of 80.8%. TG also optimized slot allocation to improve network connectivity and reduce operations on non-viable routes. Additionally, they are refurbishing cabins and seats throughout Q1 and Q2 of 2024 to enhance customer experience and launched a new mobile app in May 2024 to improve passenger convenience.

While TG faces challenges in achieving profitability, the positive trends in revenue, passenger numbers, and operational efficiency indicate signs of recovery. The airline's focus on optimizing its network, improving customer experience, and managing costs will be crucial for its future success.