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SET-listed Thai Airlines 1st Quarter Results Hit by Pricey Fuel
22nd May 2017
Higher cost of fuel was the main reason why three out of four Thailand-registered carriers reported weaker financial results in the first quarter of this year. Bangkok Airways, Thai Airways International (THAI) and Thai AirAsia all reported lower net profits in Q1 2017 compared to the same period last year.
Of the three, Bangkok Airways had the worst Q1 2017 financial performance, reporting 64.1% lower net earnings in this period compared to the same quarter in the previous year. The Asia’s Boutique Airline posted 565 million baht, whereas last year it posted 1 billion.
Flag carrier THAI didn’t do much better as is net profit fell by 47.3% to 3.17 billion baht, whereas Asia Aviation Plc. (AAV), made 570 million baht net profit, which is down 43% from Q1 2016. AAV holds 55% of Thai AirAsia.
All three airlines blamed higher fuel costs for their weaker performances in this quarter. Given the fact that, for example, for Bangkok Airways, fuel amounted to 20.3% of the total costs in Q1 2017, up nearly 5 per cent from 15.8% in the same period last year, this is most likely true.
BA’s revenue for the period from January to March was 7.46 billion baht, or 3.9% down from previous year.
As an added problem, THAI also reported a 12% lower passenger yield, which, together with pricey fuel and strong competition, dropped its revenue to 49.8 billion baht or 0.8% down from last year.
On the other hand, AAV reported a 9.15 billion baht revenue (up 2%), thanks to a better (11% growth) passenger volume, as well as a load factor of 89%.
Meanwhile, only the fourth SET-listed airline, Nok Air stayed in red. Nok Air did report a loss (290 million baht), but it was smaller than they had in the January-March period of 2016 when it was 466 million baht.
Nok Air reported that the jet fuel price increased from $42.29 in Q1 2016 to $64.32 this year and has accordingly increased fuel bills to 1.05 billion baht. This has accounted for 24% of Nok Air’s total operating costs.
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