Thai Airways International Plc (THAI) remains upbeat about its full-year revenue growth target of 5-10% despite a 47.3% drop in net profit in the first quarter amid fierce competition and fuel price hikes.
Usanee Sangsingkeo, THAI's acting president, said yesterday that the company posted a first-quarter net profit of 3.17 billion baht (1.45 baht per share), down 47.3% year-on-year.
The company's total revenue in the first three months was 49.8 billion baht, down 0.8% year-on-year, due to lower passenger and excess baggage revenue, decreasing fuel surcharges and tougher competition.
Total expenses rose by 9.1% to 46.9 billion baht as fuel expenses climbed 18.5% to 2 billion baht. Jet fuel prices rose by 45.8% in the quarter, Ms Usanee said.
Non-fuel operating expenses rose by 2.04 billion baht or 6.6% year-on-year, mainly from increases in production and traffic as well as the increase in maintenance and overhaul expenses.
Ms Usanee said high competition in the aviation industry resulted in the decline of the company's passenger yield by 12% from 2.5 baht per head per kilometre to 2.2 baht per head per kilometre.
The profit decline was mainly attributed to the fuel price hike, she said, adding that fuel prices increased to an average of US$62 (2,141 baht) over the period, compared to $48 in the first quarter of last year.
"THAI's cabin factor in the first quarter was as high as 82.8% with total passengers of 6.52 million people, up from 77.5% in the same period of last year and higher than the industry's average cabin factor rate of 80.1%," Ms Usanee said.
Narongchai Wongthanavimok, THAI executive vice-president for finance and accounting, said high competition forced the company to sell tickets at lower prices while the fuel price hike put pressure on the company's expenditures.
As of March 31, THAI's total assets were 282.9 billion baht and total liabilities totalled 245.9 billion baht.
THAI shares closed yesterday on the Stock Exchange of Thailand at 18.20 baht, up 20 satang, in trade worth 139 million baht.