All airlines listed on the Stock Exchange of Thailand showed weaker financial performance in the first quarter, a reflection of margins being squeezed by higher costs, especially for fuel, and by weak yields.
Three of the four -- Thai Airways International (THAI), Bangkok Airways and Thai AirAsia (through Asia Aviation Plc or AAV) -- reported lower net profit than in the same quarter of last year.
Nok Air remained in the red, albeit with a smaller loss, as all of the four singled out higher fuel costs as a prime cause for cutting into their profitability. The budget airline made a net loss of 290 million baht in January to March, narrowing the loss of 466 million recorded in the same period last year.
Among the three in the black, regional carrier Bangkok Airways reported the steepest decline in net earnings for the first quarter, 64.1% lower, to post 565 million baht, down from 1 billion in the previous period.
It was followed by THAI, whose net profit shrank by 47.3% to 3.17 billion baht.
AAV, which owns 55% of Thai AirAsia (TAA), Thailand's largest low-cost carrier, made 570 million baht in net profit, down 43% in the same period last year.
Flag carrier THAI said revenue fell 0.8% to 49.8 billion baht, due to lower passenger yield (down 12%) amid fierce competition and a reduced fuel surcharge.
Bangkok Airways, whose revenue fell by 3.9% to 7.46 billion baht, blamed its weaker net profit mainly on the surge in fuel costs.
Fuel costs rose to 1.13 billion baht from 756.5 million baht in the previous period, with fuel representing 20.3% of total costs, up from 15.8%.
The increase was mostly due to higher average market fuel prices, and a hike in excise tax rates on jet fuel used for domestic flights from 1% to 23% imposed in January.
Nok Air noted that the average jet fuel price was US$64.32 a barrel in the first quarter, up from $42.29 a barrel in the same period last year.
As a result, the airline increased fuel bills to 1.05 billion baht, accounting for 24% of total operating costs, up 81%.
AAV's revenue for the period rose 2% to 9.15 billion baht, equal to that of TAA, propelled by 11% growth in passenger volume (carrying 4.9 million for the period) with a load factor of 89%, up 1% from the same period last year.
Meanwhile, the initial financial results of a sample of 24 global airlines picked by the International Air Transport Association (IATA) showed a net profit of $1.08 billion, about a third of the $3.10 billion recorded in the same period last year.
The margins were depressed by higher costs and weak yields at the start of this year.
Upward pressure on airline costs means that the operating environment will remain challenging.
With yields looking stabler, the squeeze on margins may ease over the period ahead, the airline industry group said in its latest analysis.