Thai Airways revealed that during 2018 the whilst the firm saw a 3.9% increase in revenue, it still lost THB 11,569 million.
Speaking at a special news conference last week to deliver the results, Sumeth Damrongchaitham, THAI President, said the company had encountered fierce competition, unpredictable high fuel prices (the highest in the past 4 years) and whilst total revenues were THB 199,500 million, an increase of THB 7,554 million (3.9%) from different revenue sources including passenger and excess baggage revenue, freight and mail revenue, revenue from other activities, and other income. Total expenses was THB 208,558 million which increased from last year enlarged by THB 19,468 million (10.3%) due to an increase in fuel expenses of THB 9,881 million (19.7%) from the rising average fuel price, which increased significantly by 30.1%. However, fuel hedging performance was better than last year’s. Non-fuel operating expense enlarged by THB 9,802 million (7.3%) due to the increase of aircraft maintenance and overhaul costs, lease of aircraft and spare parts, and depreciation and amortization expenses.
Sumeth Damrongchaitham also said that in 2018, THAI took delivery of five Airbus A350-900 aircraft while decommissioned two Boeing 737-400 aircraft, resulting in a total number of 103 active aircraft in THAI’s fleet as of December 31, 2018, with an addition of three aircraft compare to the figure as of December 31, 2017. Aircraft utilization was 12.0 hours equaled to the previous year. Production traffic (ASK) increased by 2.9% while passenger traffic (RPK) increased by 1.0%. Average cabin factor was 77.6% lower than last year’s figure of 79.2%. The total number of passengers carried was 24.3 million, which is a decrease of 1.0% compared to the previous year.
This year, THAI changed the accounting treatment consisted of changing the estimated residual value of aircraft and spare engines from 10 percent to 6 percent of the initial cost value resulting in an increase of THB 3,129 million in depreciation of aircraft and spare engines in 2018, and a review of the duration of sold but unused tickets which was previously recognized as revenue after the date of issue was over 24 months changed to 15 months causing passenger revenue of 2018 to increase by THB 1,028 million.
Moreover, both of production and passenger traffic increased while finance cost decreased by THB 215 million (4.7%) from cash management and ongoing financial restructure from last year. As a result, THAI and its subsidiaries’ performance for the year 2018 had operating loss of THB 9,058 million compared to THB 2,856 million profit of last year.
This year THAI and its subsidiaries had impairment loss of assets and aircraft, at the amount of THB 3,459 million but had gains on foreign currency exchange at the amount of THB 911 million, mainly from loan revaluation. Consequently, THAI and its subsidiaries reported net loss of THB 11,569 million. Loss attributable to owners of the parent amounted to THB 11,625 million. Loss per share was THB 5.33 while last year’s loss per share was THB 0.97.
As of December 31, 2018, total assets were THB 268,721 million, a decrease of THB 12,054 million (4.3%) from as at December 31, 2017. Total liabilities as of December 31, 2018 totaled THB 248,265 million, a decrease of THB 497 million (0.2%) from as of December 31, 2017. Total shareholders’ equity amounted to THB 20,456 million, a decrease of THB 11,557 million (36.1%) resulting from loss in operating results.
However, THAI implemented the transformation plan for the year 2018 in order to solve the negative retained earnings and enable THAI to generate future sustainable profit. In 2019, THAI plans to generate more aggressive revenues and make various improvements including modernized and competitive fleet, services enhancements from ground to sky, commercial strategies: digital marketing and ancillary revenues, business expansion such as Maintenance Repair and Overhaul (MRO) at U-Tapao Airport as well as human resource improvement and appropriate financial restructuring.
