Thai Airways makes net profit of B51bn for first 9 months
published : 15 Nov 2021 at 17:49
Struggling Thai Airways International (THAI) generated a net profit of 51.1 billion baht in the first nine months of the year, according to Piyasvasti Amranand, a member of a THAI panel overseeing a court-monitored debt rehabilitation plan.
Mr Piyasvasti on Monday attributed the turnaround largely to the adoption of the debt-restructuring plan which involves the sale of its assets and a workforce revamp, among other measures.
He said the company has solid financial security with sufficient cash flow to sustain its operations until a fresh loan is procured. The loan will be vital for maintaining the pace of the restructuring.
The airline was waiting to see if the Finance Ministry, which is one of the airline's large shareholders, will come to the financial support of the company.
Last week, Finance Minister Arkhom Termpittayapaisith said the airline may need a loan of only 25 billion baht to boost its financial liquidity, instead of an initially estimated 50 billion baht.
The minister said the company will make a decision on the borrowing method and there will be no need for the Finance Ministry to guarantee the loan.
On Monday, Mr Piyasvasti said without the ministry guaranteeing the loan, the airline has a few options at its disposal. One is to convert debt into equity worth 13 billion baht. Without the conversion and with no loan guarantee, the ministry's shares in the company would be drastically reduced from 48% at present to 8%.
Mr Piyasvasti said THAI was performing reasonably well so far. Last month, its revenue from passenger and cargo transport amounted to 1.2 billion baht, of which 90% was generated by cargo traffic. It was the airline's highest monthly earnings since the pandemic struck the country early last year.
The reopening of the country's tourism industry has pushed up passenger demand. The first 10 days of reopening on Nov 1 saw international passengers rising to 750 a day, up from 300 a day prior to Nov 1.
He expected THAI to earn at least 50 billion baht in revenue next year if there are no more serious outbreaks of Covid-19.
Meanwhile, the International Air Transport Association's (IATA) latest survey of airlines' CFOs and Heads of Cargo, conducted in early October, shows improvements in airline profitability continued in the third quarter.
Respondents were also optimistic about profits in the next 12 months, indicating that improvements in the bottom line may extend further.
Large majorities of respondents reported improving passenger and cargo volumes in the third quarter of 2021 compared to the same period in 2020, and they expect this to continue on both sides of the business for the coming 12 months.
While there were positive signs on the employment levels of respondents, work forces remain significantly smaller then prior to the crisis, and 47% of respondents expect no changes from a low base.
A slim majority (52%) of surveyed airlines posted an increase in passenger yields in the third quarter year-on-year, the first such majority since 2018. On the cargo side, respondents pointed to strong yields, both in recent months and looking forward. Combined with strong cargo volumes, this indicates that cargo revenues are expected to remain very supportive for airlines in the next 12 months.