THAILAND. Thai Airways International will post THB 3 billion (US$71 million) loss in the third quarter as SARS outbreak dents passenger traffic.
The expected quarterly loss for the April-June period will be the Thai carrier’s first in more than two years.
However, according to a Dow Jones report, analysts anticipate earnings to recover strongly in subsequent quarters due to improved passenger traffic and an aggressive promotional campaign.
The carrier is predicted by analysts to post a third quarter net loss of around THB 3 billion (US$71 million) in the third quarter, compared with a net profit of THB 3.45 billion (US$82 million) a year earlier.
Thai Airways is scheduled to issue third quarter earnings on Friday. In the second quarter ended 31 March 2003, the airline recorded a net profit of THB 4.79 billion (US$114 million).
Other Asian carriers, including Cathay Pacific Airways, Singapore Airlines and Japan Airlines, have reported losses for the April-June period.
Looking to the future, TISCO Securities expects Thai Airways’ net profit for the financial year ending 30 September 2003 to be THB 9.21 billion (US$225 million), a decrease of -9.5% year-on-year.
The fall in passenger traffic for the April-June period 2003 was predicted to be around -28% year-on-year. Higher oil prices and an expected drop in foreign exchange gains likely squeezed margins, analysts said.
Thai Airways President Kanok Abhiradee said last month that load factor – the percentage of seats filled – was as low as 54% to 55% in April and May, compared with normal levels of around 70%. He said the cabin factor had jumped to slightly over 60% in June and was expected to return to normal levels by September or October.
Looking forward, most analysts were optimistic on earnings prospects given the signs of recovery in passenger traffic. Thai Airways said it was able to restore its flight schedule back to pre-SARS levels from 1 July, with its entire 81-aircraft fleet being fully utilised again. It recently launched a major promotional campaign, as part of which it is giving away 20,000 free return tickets to passengers.
