THAI and its subsidiaries announced its second quarter results 2016 that had an operating loss at the amount of THB 1,782 million (an improvement from the same period last year by 62.2%). During this quarter, special items were the ongoing Transformation Plan and impairment loss of assets and aircraft that totaled THB 2,300 million with a gain on foreign currency exchange that totaled THB 595 million resulting in the net loss of THB 2,915 million. The continual Transformation Plan generated a positive operating profit for the Group during the first half of 2016 at THB 5,397 million, which indicated an outstanding enhancement compared to last year’s loss of THB 297 million.
Mr. Charamporn Jotikasthira, President of Thai Airways International Public Company Limited (THAI), stated that during the second quarter of 2016, THAI continued the second phase of transformation plan “Strength Building” and established its 10 year plan. THAI also took further steps by implementing Royal Orchid Plus “MyWallet” for the convenience of its members, and process redesign was implemented by Business Units such as Catering and Ground Customer Service to improve efficiency. In 2016, the Company implemented its Mutual Separation Plan (MSP), whereby 280 staff entered the program which took effect on June 1 and July 1, 2016, respectively. The State Enterprise Policy Committee (SEPO) meeting was held in July 2016, whereby THAI’s Transformation Plan was regarded to be undergoing good progress which was consistent with the latest Skytrax Award 2016 that recognized THAI as the World’s Most Improved Airline. The award reflects the Company’s quality and performance improvements in many categories: product quality, ground services, and inflight services. Moreover, THAI received an award for the World’s Best Airline Lounge Spa.
Normally, the second quarter is the low season combined with fierce competition, especially in the Asia-Pacific area due to increased competition with low cost airlines, Middle East carriers, and terrorism in Europe which is an important market for THAI. These factors caused the 0.6% decrease in passenger traffic (RPK) while production traffic (ASK) reduced by 0.2%. Average cabin factor was 69.0% which dropped slightly from last year. In June 2016, THAI decommissioned one aircraft under operating lease which was a Boeing 777-200, bringing the total number of aircraft in the fleet to 94 as of June 30, 2016, which was one aircraft less than the same quarter last year. Aircraft utilization increased from 10.9 hours last year to 11.0 hours this year with 5.11 million passengers carried, representing a 0.8% increase from last year.
THAI and its subsidiaries’ financial performance for the second quarter of 2016 showed an operating loss of THB 1,782 million, a decrease of THB 2,931 million (62.2%) as fuel expenses decreased by THB 3,182 million (21.3%) resulting from jet fuel prices that reduced by 27.9%. Non-fuel operating expenses decreased by THB 184 million (0.6%) from last year. The fuel surcharge reduced based on the drop in jet fuel prices, which resulted in THB 536 million (1.6%) reduction in passenger and excess baggage revenue that was also due to better revenue management.
THAI and its subsidiaries had an expense of THB 427 million from the Mutual Separation Plan and THB 1,873 million loss of impairment on assets and aircraft expenses but had THB 595 million gain in foreign currency exchange. Consequently, THAI and its subsidiaries reported a net loss of THB 2,915 million, a decrease in losses at THB 9,839 million compared to the same period last year. Loss attributable to owners of the parent amounted to THB 2,921 million. Loss per share was THB 1.34 compared to THB 5.85 last year.
As of June 30, 2016, THAI and its subsidiaries’ consolidated total assets were THB 292,895 million, a decrease of THB 9,576 million (3.2%) from December 31, 2015, which were from short-term and long-term repayment. Total liabilities were THB 257,923 million, which was a decrease of THB 11,622 million (4.3%) from 31 December 2015. Total shareholders’ equity amounted to THB 34,972 million, which was an increase of THB 2,046 million (6.2%).