Thai Airways losses narrow on asset sales, eyes maintenance business

BANGKOK (Reuters): Thai Airways International Pcl reported a narrower second-quarter loss on Friday on higher revenue and property sales.

Thai Airways made a net loss of 3.1 billion baht ($93 million) in the April-June period compared with a loss of 5.2 billion baht a year earlier. The carrier missed Thomson Reuters I/B/E/S estimates of 1.3 billion in losses.

Earnings were helped by a 655 million baht gain from the sale of its hotel business and 632 million baht from property sales.

Thai Airways reported revenue of 47.24 billion baht, up 4.6% from a year ago on higher freight and mail revenue of 5.44 billion baht, up 13.9% from a year ago, and passenger and excess baggage revenue of 36.85 billion baht, up 0.7%.

It blamed the loss on higher jet fuel price, low demand and intense competition.

Thailand’s budget carriers also reported weak earnings due to the same factors. State-owned Thai Airways reported cabin factor, a measure of how much of the airline’s capacity was used, of 75.8%, down from 78.5% from the same period last year.

The earnings announcement comes during leadership changes at the legacy carrier, which is also in the midst of a transformation plan that aims for sustainable operating results through efficient asset management and cost control.

A new chairman took the helm in July and a new president is due to take over later this year.

For the remainder of 2018, Thai Airways plans to sell off more businesses and properties.

Thai Airways expects the US Federal Aviation Administration to upgrade Thailand to Category 1 by year-end after which the airline could add more US routes.

In July, the carrier said it planned to purchase 23 new jets for around $3 billion.

It was also eyeing revenue from aircraft maintenance from its joint venture with Airbus. ($1 = 33.3000 baht)