The situation for the once-bad Thai Airways is improving as European travelers return to Thailand in droves.
2022 may be the year when Thai Airways returns to operating profitability as the Finance Minister revealed that state banks will provide all necessary facilities to the national carrier.
Thai Airways is currently playing a strategic role in transporting foreign tourists to the Kingdom, and is expected to complete the recovery plan by 2024.
Thai Airways shares may trade again on the Stock Exchange of Thailand (SET) sooner than expected after Finance Minister Arkhum Termpetiyabaisith revealed on Monday (August 8) that the airline is on track to exit a recovery plan from 2024, as it… Benefit from a stronger than expected rebound in foreign tourism.
Thai Airways appears to be benefiting from the boom in foreign tourism underway in the kingdom, with passenger numbers up more than 600% since the start of the year.
On Monday, Finance Minister Arkhum Termbitayabiseth, who has long been considered a friend of the national carrier in the government, said the company’s better operating performance this year had put it in a position where it no longer needed only 13 billion baht in loans as part of recovery plans. Placed with bankruptcy court in Bangkok last June.
This amount was set at 25 billion baht and had previously received a negative response from the Ministry of Finance, in particular from the Director of the Public Debt Management Office, Patricia Mungkhonvanate, who argued, in November last year, that it was inappropriate, because the airline was no longer an institution governmental.
In May 2020, the then-struggling airline filed for bankruptcy, then spent at least 13 months trying to come up with a survival plan acceptable to both the bankruptcy court and its creditors, with repeated claims.Overtime.
On Monday, Arkhum said it now appears that the airline may emerge from bankruptcy a year earlier, in 2024, and state banks will be able to mitigate borrowing needs.
The airline reported a net profit for 2021, the first since 2012 with one-time earnings and profits from subsidiaries, although it posted an operating loss of 19.7 billion baht.
See: The situation of Thai Airway is improving, its restructuring is scheduled to be completed in 2024
The airline started to return to profitability by posting a net profit of 11.1 billion baht for the first six months of 2021 in August last year.
The profit was made through a one-time gain as the airline recorded an operating loss again, for the full 12 months of 2021, of 19.7 billion baht, although the debt and airline restructuring activity of the airline resulted in a net gain of 81.5 billion baht. has become. , bringing its net profit to 55.1 billion baht for the year 2021.
This is the company’s first profit since 2012.
The airline managed to survive until 2021 with revenues from the freight and postal services business, which amounted to 10 billion baht out of its total revenue last year, which amounted to 23.747 billion baht.
The number of passengers in 2022 increased by more than 600% and continues to increase, as the airline benefits from increased demand.
However, all of that has changed for the better this year, with the number of passengers increasing in recent months to more than 13,000 per day from a modest 2,000 per day at the beginning of the year.
Thai Airways has focused its passenger flight services on providing access to Thailand for travelers from Europe with flights serving London, Paris, Frankfurt, Copenhagen, Zurich and other Scandinavian airports.
The airline also recently opened flights from India while resuming flights to and from Australia as well as Singapore and Malaysia.
The national airline also cooperates with partner airlines on its flights to Dubai, while in the interior of the country its subsidiary, Thai Smile, operates and develops its domestic flight programme, including connections between Suvarnabhumi Airport, Roi-Et and Trang, Also as regular flights between Don Mueang Airport and Chiang Mai.
Of strategic importance to Thailand
The airline has proven to be of strategic importance to the kingdom this year as other international airlines have been slow to resume their full range of services at Bangkok’s Suvarnabhumi Airport and other Thai international airports, due to resource constraints and a surprisingly strong recovery in international air travel demand, which has left airlines struggling To find employees at airports.
At the end of July, British Airways announced that it would not resume its regular flights between London and Bangkok, which are scheduled for the end of the year, because the British company decided to give priority to its flights to Singapore, where the demand for business class seats is increasing. Superior.
Recently, the Chairman of the Board of Directors of Airports of Thailand (AOT), Nitini Sirismathakarn, revealed that the current number of air connections to Thailand is only 33% of the pre-pandemic level.
The Governor of Tourism Authority of Thailand (TAT), Yuthasak Supasorn, has hinted that at least 55% of the seat level will be needed before the pandemic this year for the kingdom to reach its full potential, as it aims to have more than 10 million. visitors.
See: Thailand targets 10 million tourists in 2022, with tourism tax deferred
At the same time, Thai Airways will operate regular charter flights from the UK, in cooperation with British travel agencies, from the end of the year, to meet the high demand for this market among potential tourists in Thailand.
As of mid-May 2022, 85,926 foreign British tourists have entered Thailand.
According to current forecasts, this figure should exceed 120,000 expats, making this country the second largest market in the Kingdom.
On Monday, Minister Arkham said that the European market is currently the most profitable for the airline.
However, although the minister was optimistic about the airline’s prospects, he made it clear that the Thai government was not seeking to return it to state-owned status, noting that a 40% stake in the ministry would be an ideal arrangement to maintain competitiveness. to the carrier once its reorganization plan is completed.
The plan helped the airline cut costs last year by 40.396 billion baht, or 48.2 percent, to an operating level of 43.449 billion baht for the year.
This year, thanks to greater efficiency gains in passenger and cargo operations, despite higher fuel costs, the airline is expected to post a more profitable performance thanks to an increase in passenger numbers and ticket prices.
This means that in addition to reducing borrowing or lending needs, the airline will be able to meet its business objectives under the rehabilitation plan a year ahead of schedule in 2024.
Minister Arkhum also suggested that the suspension of the company’s shares from May 2021 on the Stock Exchange of Thailand (SET) could be lifted before the currently planned date, which is 2025.
Source: Thai Examiner