Thai AirAsia parent Q1 operating profit halves

The parent company of Thai Airasia, Asia Aviation, first quarter operating profit fell 46% to Bt1.1 billion ($34.7 million).

Revenue for the quarter ended 31 March was flat at Bt11.6 billion, but expenses rose 10% to Bt10.5 billion. Net profit fell 50% to Bt497million.

The company says that fuel costs rose during the quarter, as did airport and MRO costs. Despite this, the carrier’s CASK was flat compared with a year ago at Bt1.53 due to a 10% increase in ASKs and a longer average stage length.

RPKs grew 9%, while load factor was flat at 91%. The carrier’s average fare for the first quarter was Bt1554, down 7%.

Cash and cash equivalents were Bt4.1 billion on 31 March, down from Bt5.97 billion a year earlier.

In its outlook, the carrier notes that international trade frictions could hurt the global economy and affect exchange rates.

“As the company has revenues and expenses in various different currencies such as passenger fares, repair and maintenance as well as aircraft rental, the company has adopted the practice of natural hedging by matching cash expenses and revenues in the same currency as practically possible,” it says.

It believes that global crude prices could fall in the second half of the year, but has hedged 52% of its 2019 fuel conception at cost of $80 per barrel.

It adds that Thailand’s tourism industry will remain strong in 2019. It plans to add new routes later this year from Bangkok Don Mueang to new Vietnam destinations such as Can Tho and Nha Trang, as well as the addition of a Chiang Mai-Da Nang service.

It plans two Cambodia services, Bangkok Don Mueang-Sihanoukville and Phuket-Phnom Penh. In addition, it will add a Bangkok Don Mueang-Ahmedabad service.

“This diversified strategy tends to minimise the risk of dependence on the major customer base, enhancing the company and Thai AirAsia’s sustainable revenue growth in the future and maintain its leading low-fare airline in Thailand,” it says.“In 2019, Thai AirAsia maintains a target of 23.15 million passengers, with a solid load factor at 86%, and plans to acquire more energy efficient aircraft during the year to bring its fleet to 63 aircraft.”

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