Thai Airways International Public Company Limited (THAI) and its subsidiaries announced third quarter 2016 results with an operating loss of THB 836 million (80.3% better than the same period last year ). During this quarter, impairment loss of assets and aircraft totaled THB 624 million while gain on foreign currency exchange was THB 120 million resulting in the net loss of THB 1,591 million. The Company continues to operate under transformation plan which resulted in THB 4,560 million operating profit for the first nine months in 2016. This is quite an improvement from THB 4,536 million loss in the same period last year.
Mr. Charamporn Jotikasthira, THAI President, stated that during the third quarter of 2016, THAI implemented the second phase of its transformation plan “strength building” which included improving business unit work processes for better efficiency, using information technology to enhance revenue management effectiveness and other services such as Fare Management System to rapidly establish more competitive fares, Route Network Management System for better route connectivity, and Service Ring to integrate all touch points for service excellence. All of these lead towards preparation for the next stage of the transformation plan for “sustainable growth” in 2017. During this quarter, THAI’s Board of Directors also granted approval of the products and inflight equipment improvement plan for six Boeing 777-200ER aircraft based on the 10 year long-term product development plan. Ongoing product and service improvements resulted in THAI receiving the TTG Travel Award as Best South East Asian Airline for 10 consecutive years, whereby THAI was inducted into the TTG Travel Hall of Fame.
In this quarter, THAI took delivery of one Airbus A350-900XWB on August 29, 2016, decommissioned one Boeing 777-200 operating lease aircraft, resulting in a total number of 94 active aircraft that was reduced by one aircraft less than September 30, 2015. Aircraft utilization increased from 10.8 hours last year to 11.6 hours this year with 5.50 million passengers carried, representing a 7.6% increase from last year.
THAI and its subsidiaries’ financial performance for the third quarter of 2016 showed an operating loss of THB 836 million, a decrease in loss of THB 3,403 million (80.3%) from the same period last year. The main reason was due to fuel expenses that decreased by THB 5,504 million (33.6%), resulting from drop in jet fuel prices by 15.3% and better fuel risk management. Non-fuel operating expenses increased by 6.7% due to more traffic production, maintenance and overhaul expenses due to a higher engine maintenance rate and number of repaired engine spare parts compared to the same period last year. The decreasing fuel surcharge resulted in a reduction of passenger and excess baggage revenue by THB 919 million (2.5%). Freight and mail revenue increased by THB 189 million (4.3%) and all business units had more revenue than last year.
THAI and its subsidiaries had THB 624 million impairment loss on assets and aircraft expenses but had THB 120 million gain on foreign currency exchange. Consequently, THAI and its subsidiaries reported the net loss of THB 1,591 million, a decrease of THB 8,303 million (83.9%) from last year. Loss attributable to owners of the parent amounted to THB 1,601 million. Loss per share was THB 0.73 compared to THB 4.54 last year.
As of September 30, 2016, THAI’s consolidated total assets were THB 287,356 million, a decrease of THB 15,115 million (5.0%) when compared to December 31, 2015, which primarily was the result of short-term and long-term repayment, additional provision for impairment of aircraft and aircraft that was sold this year. Total liabilities totaled THB 253,878 million, which was a decrease of THB 15,667 million (5.8%). Total shareholders’ equity amounted to THB 33,478 million, which was an increase of THB 552 million (1.7%) when compared to December 31, 2015.