Thai airlines soar with record profits despite rising costs
Thailand’s booming aviation sector has given Thai airlines Bangkok Airways and Thai AirAsia a profitable first quarter, despite the challenges posed by escalating costs.
Bangkok Airways, known for catering to leisure travellers, reported a robust comeback with tourist arrivals reaching 87% of pre-pandemic levels in the first three months of 2024. A standout achievement was the launch of direct flights from Koh Samui to Chongqing and Chengdu in China.
Surging travel demand led to a 15.5% increase in seats flown compared to the same period last year, with the airline operating at 75.6% of its pre-pandemic capacity. Operating profits nearly doubled to 2.4 billion baht in the quarter ending March 31, up from the previous year. Revenue soared by 36.3% to 7.8 billion baht, while expenses climbed 19.9% to 5.4 billion baht. Net profits also more than doubled to 1.9 billion baht.
The airline’s capacity, measured by Available Seat Kilometres (ASKs), rose by 16.5%, and Revenue Passenger Kilometres (RPKs) increased by 18.4%. Passenger load factors improved by 1.3 percentage points to reach 88.4%.
However, as of March 31, Bangkok Airways’ cash reserves had dipped by 10% to 11.7 billion baht compared to the end of 2023.
Similarly, Asia Aviation, the parent company of Thai AirAsia, highlighted the resurgence of tourism in Thailand. Chinese tourist numbers have rebounded to 56% of 2019 levels, while Indian tourists have surpassed Japanese visitors, influenced by the yen’s historic weakness.
Despite a surge in passenger numbers, Thai AirAsia’s operating profit plunged by 92% to 83.7 million baht. Revenues jumped 43% to 14 billion baht, but expenses spiked 58% to 13.9 billion baht. Significant cost increases were noted in fuel (up 56%), staff (up 28%), and maintenance, repair, and overhaul (MRO) services (up 75%). Capacity rose by 28%, with RPKs increasing by 31%, and load factors edging up one percentage point to 93%.
Looking ahead, Thai AirAsia plans to expand its fleet from 56 to 60 aircraft by year-end, reported Flight Global.
“We expect a 20 to 23% increase in revenue from sales and services, bolstered by fare growth and efficient management.”
They also anticipate significant improvements in cash flow and financial flexibility, with cash reserves rising 26.4% to 1.6 billion baht by March 31.
