Thai Airways is expected to report a 90% plummet in net profits from 2Q2010 to THB154 million (USD5.1 million) in 3Q2010, on the back of foreign exchange losses and a THB445 million (USD14.8 million) write-off of spare parts and inventory, according to DBS Vickers Securities (The Nation, 28-Oct-2010). In 3Q2010, the carrier reported a 0.8 ppt year-on-year increase in load factor to 74.7% while yield rose 5.3% to USD 6.67 cents. According to the securities house, 4Q2010 results for Thai Airways are expected to be better as the peak season in tourism commences. Tisco Securities forecast Thai Airways to return to operating profitability during the quarter with an operating profit of THB3,540 million (USD118.1 million), compared with an operating loss of THB1,250 million (USD41.7 million) in the previous corresponding period.
Thai Airways to report 90% plummet in net profit in 3Q
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Thai Airways is planning to resume capacity expansion in 2017 with additional flights to Europe driving most of the ASK growth. The group projects a nearly 6% increase in ASKs in 2017, restoring capacity to 2013 levels after three years of declines.
Thai Airways plans to take delivery of seven aircraft in 2017 – five A350-900s and two 787-9s – while phasing out just two aircraft (two A330s). As a result, the group’s widebody passenger fleet will increase by five aircraft, enabling a resumption of long haul capacity growth. Thai is able to expand in Europe as the A350-900s and 787-9s are delivered, and is also intending to use either type to launch nonstop flights to the US in late 2017.
Thai Airways also plans to retrofit 15 of its existing widebody aircraft in 2017, including six 787-8s, six 777-200ERs and three A330-300s. The 787-8 retrofits include new crew bunks, enabling the type to be used on long haul routes to Europe and supporting further long haul capacity growth.
Thai Airways SWOT: opportunities for growth, but challenges as competition further intensifies
Thai Airways is approaching a critical juncture as it completes a restructuring and seeks to resume growth. Its home market offers opportunities and an envious growth rate, but intensifying competition creates challenges.
Thai Airways is sandwiched between rapidly expanding low cost airlines and ambitious Gulf airlines. Its multi-brand strategy has so far proven to be a less than sufficient response.
In this SWOT analysis CAPA examines the Thai Airways Group’s strengths, weaknesses, opportunities and challenges.