Thai Airways International Public Company Limited (THAI) announced its first half 2015 operating results with a net loss of THB 8,218 million. Its primary aviation business operating results incurred a net loss of THB 297 million – representing an improvement of 97% from the net loss of THB 10,986 million in the same period last year. Loss in this year period was impacted mainly from special items including impairment of decommissioned aircraft, MSP staff expenses in accordance with the transformation plan, profit from the foreign currency exchange rate and tax credit in conjunction with certain revenue drop from tourism low season.
Mr. Charamporn Jotikasthira, THAI President, announced that the Company has currently undergone its transformation plan since the first quarter of 2015. In the second quarter, the day flight to Frankfurt was suspended as of 1 May 2015, based on network adjustment plans to curb losses. Fleet strategy was made by decommissioning one aircraft while taking delivery of two new aircraft, which resulted in a fleet of 94 aircraft as of 30 June 2015. THAI offered staff the opportunity to participate in the Mutual Separation Plan (MSP) and a similar Golden Handshake program for cabin crew, in order to manage job positions that were affected from flight and route adjustments. These staff reduction programs will help improve the personnel expense structure as well as reduce longer time expense.
While the second quarter was the tourism low season, the Company proceeded with the transformation plan by cutting losses, reducing expenses and increasing revenue and sales. Therefore, in the second quarter of 2015, the Company and its subsidiaries produced a 20% increase in passengers flown, 11% increase in Revenue Passenger-Kilometer (RPK) and only 2% increase in Available Seat-Kilometer (ASK) when compared to the same period last year. Hence, the cabin factor showed an improvement of 5.7% from 63.5% last year to 69.2% in this reporting quarter. Therefore, the losses from operations reduced by THB 2,986 million (improved by 39%) from last year. The total revenue of THB 41,807 million (THB 1,557 million baht or 4% decline) were primarily due to the drop in cargo and commercial mail revenue as a result of the drop in imports together with cargo aircraft decommission. The total expenses were THB 45,111 million showing a decrease of THB 4,362 million (9%) mainly from average fuel cost reductions.
During this quarter, the Company had special expenses as high as THB 7,827 million comprised of personnel expenses of THB 3,722 million from implementation of the transformation plan by lowering staff size through the Mutual Separation Plan (MSP) and Golden Handshake programs, THB 426 million from aircraft impairment, foreign currency exchange loss of THB 3,679 million. These caused a net loss of THB 12,759 million in the second quarter of 2015, higher loss than last year by THB 5,097 million. This quarter loss was 5.85 baht per share comparing to a loss of 3.51 baht per share last year.
For operating results in the first half of the year 2015, the Company had a net operating loss of THB 8,218 million, an improvement of 20% compared to the same period last year, with special one-off expenses of THB 9,977 million comprised of THB 3,722 million for the early retirement programs, THB 12,230 million from assets and aircraft impairment offset with THB 5,975 million in foreign currency exchange gain. Should we include these special one-off expenses, the Company’s operating results would be a loss of THB 297 million which was a 97% improvement from the same period last year.
As of 30 June 2015, the Company and its subsidiaries had total consolidated assets at THB 296,429 million, a decrease of THB 10,838 million (3.5%) from 31 December 2014 mainly due to aircraft impairment. Total liabilities totaled THB 264,544 million, a decrease from 31 December 2014 by THB 1,427 million (0.5%). Total shareholders’ equity was THB 31,885 million – which was a decrease from 31 December 2014 at THB 9,410 million (22.8%).