Thai carriers remain profitable but rising costs bite

Thailand’s two full-service operators were in the black in their Q2 earnings, as passenger traffic grew and revenues remained strong. However, the two carriers – flag carrier Thai Airways International and regional operator Bangkok Airways – differed in revenue and cost increases, reflecting the different operating environment they face. <br/>Thai posted an operating profit of Bt5.9b ($167m) for the three months ended 30 June, down nearly 31% year on year. The Star Alliance carrier, which is undergoing business rehabilitation, attributed the profit shortfall to an increase in expenses, which outpaced a rise in revenue. For the quarter, Thai recorded an 18% jump in revenue to around Bt44b, led by a 16% increase in passenger revenue. Thai carried 3.8m passengers during the quarter, up 13.7% year on year. Capacity grew by 21%, far outpacing an 11% increase in traffic. The airline also managed to keep its yields stable, with passenger yields growing 3% year on year. However, quarterly expenses rose 32% to Bt38b, with both fuel and non-fuel costs increasing. The rise in costs came as Thai added four aircraft to its fleet – three Airbus A350s and a single Boeing 787-9 – and the Thai baht depreciated against the US Dollar. <br/>