Thai Airways International Plc (THAI) remains in the red, reporting a fourth successive loss in the year's first quarter as it singled out Thailand's prolonged political turmoil as the prime cause.
The flag carrier posted a net loss of 2.63 billion baht in January-March compared with a net profit of 8.29 billion in the same period last year.
There is a consensus among analysts that THAI will continue to report losses in the second and third quarters to the tune of 2-3 billion baht in each one, while the loss could be smaller in the fourth quarter if blessed by high-season travel demand.
For the whole of 2014, THAI is expected to either post the same size loss as last year, at 12 billion baht, or 3-7 billion baht in the best-case scenario, analysts said.
But special items such as foreign exchange gains or losses and impairment losses on assets and aircraft would add variation to earnings projections.
In the first quarter, THAI recorded an impairment loss on assets and aircraft of 84 million baht and a 990-million-baht foreign exchange gain.
Analysts at Maybank Kim Eng and Asia Plus yesterday said the country's subdued economic outlook, compounded by extended civil unrest, fierce global competition (especially from fledgling low-cost carriers), THAI'S lower operating cost efficiency and the absence of a chief executive since late last year, was diminishing the chance for profitability at the 54-year-old airline, at least in 2014.
The drop in THAI's load factor in April to 71.7% versus 75.8% in the same month last year bodes ill, at least for the second quarter, with 2-3 billion baht in operating losses likely, said Maybank Kim Eng analyst Jaroonpan Wattanawong.
Chokchai Panyayong, THAI's acting president, said the mostly state-owned airline, like other Thai carriers, was damaged by the country's ongoing political stand-off and Bangkok's since-lifted state of emergency that caused inbound and outbound tourists to plummet by 17% quarter-on-quarter.
Chinese tourist arrivals registered the greatest decline by country (27.1%), followed by Japan (25.2%) and South Korea (12.9%). Asean arrivals fell by 27.2%.
THAI's cabin factor slipped to 70.1% in the first quarter of 2014, down from 79.8%. Operating revenue dived 11.6%.
Mr Chokchai said the airline was working on a business plan to deal with the hostile environment by means of revenue enhancement and cost control.
A workshop will be held next month in a bid to come up with a market stimulation scheme for the second half of this year, he said.
Thailand's two budget airlines — Thai AirAsia (TAA) and Nok Air — continued to show a profit in the first quarter, albeit at a lower level.
Asia Aviation Plc, the major shareholder in TAA, saw its net earnings slump by 66% to 247 million, while Nok Air's plunged 90.2% to 40.9 million.
THAI shares closed yesterday on the SET at 13 baht, down 10 satang, in trade worth 77 million baht.