Thai Airways International Public Company Limited (THAI) and its subsidiaries announced its first quarter results of 2019 with total revenue of THB 49,791 million, which is 6.9% less than the same period last year, resulting from appreciation of Thai Baht against major revenue currencies, intense competition, and the decline in passenger traffic in line with passenger production while total expenses increased by THB 989 million or 2.0% resulting from the change of the estimated residual value of aircraft and engines and higher lease of aircraft and spare part expenses. Consequently, THAI and its subsidiaries reported a profit of THB 456 million.
Mr. Sumeth Damrongchaitham, THAI President, said that THAI has concentrated on ancillary revenues under the “Montra” project which is an urgent reconstruction program as well as other operational strategies which has already been implemented since the beginning of the year with the ultimate goal to allow THAI to escape from the cycle of problems to ensure the stability through the future which has significant actions such as – integration management between THAI and THAI Smile, commercial management to seek out for more revenues from ancillary and non-air business.
In this quarter, THAI and its subsidiaries had a total 103 aircraft in the fleet, one aircraft less than the same period last year. There were 90 serviceable aircraft, which is lower than 94 aircraft last year,partly due to the impact of the Rolls-Royce Trent 1000 engine from the previous year and the grounding of the aircraft for planned maintenance schedule. Aircraft utilization was 12.5 hours, which was higher than 11.9 hours of last year. Production traffic (ASK) decreased by 2.8% while passenger traffic (RPK) decreased by 3.2%. Average cabin factor was 80.3% lower than last year’s 80.6% with 6.29 million passengers carried representing a 0.6% increase from the previous year.
On February 27, 2019, the Islamic Republic of Pakistan announced the closure of its airspace causing THAI to cancel flights that flew to Pakistan and flights to and from Europe during that time period. To deal with this issue, THAI arranged special flights and upsized aircraft to gradually accommodate passengers to their destinations which returned to normal operation on March 5, 2019, except for round-trip routes Bangkok – Lahore and Bangkok-Islamabad which announced the cancellation of the flight until May 31, 2019, as the airspace opened with strong restrictions on flights routed into each destination.
THAI and its subsidiaries’ registered total revenue of THB 49,791 million, decreased by THB 3,675 million or 6.9% when compared to the same period last year, resulting from the decrease of both passenger and freight revenue in line with the reduction of passenger and freight production and traffic. In addition, there was decreased average passenger yield due to intense competition and the appreciation of Thai Baht against major currencies that caused the lower revenue in Baht term. However, revenues from other activities increased 6.2%. Total expenses were THB 50,619 million, an increase of THB 989 million (2.0%). The significant increase in expenses such as depreciation and amortization from change of the estimated residual value of aircraft and engines, lease of aircraft and spare parts increased from the delivery of three new operating leased aircraft during 2018, and the increase of leased spare engines.
One-time expense in this quarter included THB 213 million impairment of assets and aircraft, THB 273 million gain on change in ownership interest in NOK Airlines PCL and THB 1,366 million gain on foreign currency exchange which was mainly from balance sheet revaluation. Consequently, THAI and its subsidiaries reported net profit of THB 456 million, THB 2,281 million (83.3%) lower than last year. Profit attributable to owners of the parent was THB 445 million. Profit per share was THB 0.20, 1.04THB or 83.9% lower than last year.
As of March 31, 2019, total assets were THB 267,277 million, a decrease of THB 1,444 million (0.5%) from December 31, 2018. Total liabilities totaled THB 243,700 million, which was a decrease of THB 4,565 million (1.8%) from December 31, 2018. Shareholders’ equity totaled THB 23,577 million, an increase of THB 3,121 million (15.3%) from December 31, 2018 due to the adoption of Thai Financial Reporting Standard No. 15 affecting the shareholders’ equity as of January 1, 2019, increasing retained earnings by THB 2,159 million in this quarter.