Published: 15/05/2010 at 12:00 AM
Newspaper section: Business
Demand and foreign exchange key factors
Thai Airways International (THAI) saw its first-quarter net profit jump 36.28%, buoyed by a surge in air traffic demand and foreign-exchange gains.
The flag carrier posted earnings of 10.72 billion baht (6.31 baht a share) in the January-March quarter, compared to 7.86 billion baht (4.63 baht a share) in the same period last year.
The robust increase in THAI's profit was due to a continued rebound in passenger and cargo traffic in line with the global economic recovery that began late last year.
Its passenger and cargo traffic grew 17.7% and 54.4% respectively, according to its financial statement.
The average cabin factor during the first quarter 2010 was 81%, 4.6% higher than the same period last year, and 5.6% higher than the fourth quarter 2009.
Contributing to the healthy first-quarter result was a gain of 5.69 billion baht on foreign exchange, up from 4.60 billion in the previous period.
Revenue in the first quarter increased 20.7% year-on-year to 49.8 billion baht, while expenses also rose by 15.9% to 38.49 billion baht.
The profit was in line with a forecast of 10.7 billion baht by four analysts polled by Reuters.
THAI executives said the kingdom's political unrest in March did not affect its first-quarter performance. But they agreed with analysts' view that the airline's second-quarter net profit would be hard hit by three factors.
They are the worsening political turmoil, the Iceland volcanic eruption that caused the airline to suspend its Europe flights for six days and the seasonal decline in passenger traffic demand that began in April and lasts until August.
THAI, like other Thailand-based carriers, is feeling the pinch of the ongoing violent political turmoil as 47 countries have advised their citizens to reconsider unnecessary travel to Thailand while 10 others asked their nationals not to visit the kingdom at all.
Political clashes have claimed more than 30 lives and wounded about 1,000 people.
The airline saw passenger traffic, measured in revenue per km, drop by 1.49% in April over the same month last year, or 17.04% lower than the March 2010 level. April's cabin factor was 72.15%, 1.45% higher than the same month of last year, but 8.40% lower than March 2010.
The volcanic eruption in April cost THAI about 100 million baht for each day its European flights were suspended.
Prolonged unrest is blurring the profitability outlook for the flag carrier in 2010.
THAI emerged from its worst financial period by last year posting net profit of 7.34 billion, a turnaround from the loss of 21.38 billion baht it experienced in 2008, through a rehabilitation plan.
THAI shares closed yesterday on the Stock Exchange of Thailand at 26.50 baht, up 50 satang, in trade worth 125.9 million baht.