Thai Airways posts 1Q2015 profit as Thailand tourism recovers - but the turnaround is not complete

Thai Airways returned to profitability in 1Q2015 as the airline group benefitted from the recovery of Thailand's tourism sector and the reduction in fuel prices. Labour costs were also down, an indication Thai has made progress in improving efficiency and productivity.

But it is too early to deem the restructuring Thai initiated in 2H2014, and is continuing to implement in 2015, a success. The first quarter is typically a strong quarter and Thai's 1Q2015 profit was still well below 1Q2013 levels.

Passenger yields dropped in 1Q2015 from an already low base. Thai's European operation is particularly struggling and may need another round of capacity cuts. Thai is already suspending services to two European destinations, Madrid and Moscow, and cutting capacity to Frankfurt and London.