15 November 2019
Mr. Sumeth Damrongchaitham, President, Thai Airways International Public Company Limited (THAI), said that the Company continued to heavily reduce its expenses in the third quarter, which resulted in a 7.8 percent decrease in total expenses. Currently, several negative factors impact the aviation industry and affect business operations, which caused several airlines to cease operations. Airlines are incurring losses as a result of the world economic situation, ongoing highly aggressive market competition, technological disruption, and political unrest across the globe. THAI was affected by the continually strong Baht and paid the maximum severance pay rate of 400 days of the last pay check for employees with 20 consecutive years of service or more. In addition, the Company was affected by the ongoing delay in engine repair conducted by the engine manufacturer, whereby THAI and its subsidiaries reported its third quarter results for 2019: production traffic (ASK) decreased by 3.7 percent, passenger traffic (RPK) decreased by 0.6%, average cabin factor was 80 percent higher than the same period last year that was 77.5 percent, with 6.06 million passengers carried that was higher than the same period last year by 0.8 percent. For the third quarter of 2019, THAI and its subsidiaries reported a total revenue of THB 45,016 million, which decreased by THB 2,937 million or 6.1 percent compared to the same period last year. Regardless of the quarterly results, THAI managed to control its expenses, with total expenses at THB 47,858 million, which was THB 4,029 million or 7.8 percent less than last year. THAI and its subsidiaries reported a net loss of THB 4,680 million.
During the third and fourth quarters, THAI continued to reduce expenses and increase revenue, as follows:
Expense Reduction: THAI implemented expense reduction measures within the Company, such as postponement of unnecessary investments, work reprocess to reduce expenditure and improve work quality, reduce employee benefits of Management and staff, create awareness and encourage employee participation.
Generating Revenue: THAI implemented a personalized approach to target customer groups with emphasis on creating ancillary revenue. During the first nine months of 2019 (January – September), THAI earned THB 4,604.17 million in ancillary revenue, proceeded with big data and data analytics for market analysis, in order to increase online sales. THAI also has plans to increase revenue from e-Commerce, which will be launched later this year. Flights to its new destination, Sendai, in Tohoku Region, Japan, were launched on 29 October 2019, which is operated at three flights per week, and is 80% booked through to March 2020.
Furthermore, THAI continues to proceed with its transformation plan in 2020, as follows:
- Emphasizing earning ancillary revenue based on five strategies:
1. Aggressive revenue and compatible cost structure
2. Efficiency development and seeking new opportunities
3. Creating satisfactory customer experiences
4. Working with innovation and digital applications
5. Effective human resource management
- Analyze and plan high potential routes based on the Sendai model.
- THAI Smile Airways will become a Star Alliance Connecting Partner, strengthening the flight network.
- THAI will cooperate with the Tourism Authority of Thailand (TAT) on our respective 60th anniversaries to hold a joint marketing campaign, in order to boost inbound tourism and increase national revenue.