THAI sees return to profit on the horizon

THAI acting president Narongsak Sangapong said yesterday the plan would also in-clude measures to raise revenue through the improvement of products and services for greater competitiveness.

Business units will be restructured to be more profit-oriented and generate greater customer satisfaction.

"If no more unfavourable factors emerge and the high season returns to be buoyant as ever, and the average load factor this year exceeds 75 per cent and EBITDA [a measure of cashflow] is Bt30 billion or more, THAI will return to profit this year," Narongsak said.

The national carrier lost Bt21 billion last year when the airport shutdowns ruined the high season. It swung back to a net profit of Bt7.9 billion in the first quarter of this year but is expected to post losses again in the second quarter due to the August violence. The third quarter is the low season for this business.

THAI said last week it managed to reduce non-fuel expenses by Bt8.1 billion during the first five months of this year.

Under the restructuring plan, THAI would purchase 20 Airbus A321-400 aircraft to replace old Boeing 737-400 planes, which are used in regional routes, particularly to China and Japan.

Narongsak said the plan is being revised to fit the new business structure and it is not finalised if the number of new aircraft would be maintained.

"The new president will make the decision on this, before it is submitted for Cabinet approval."

Piyasvasti Amranand will take over the controls as the new THAI president in October, but has started to receive information from his predecessor.

Narongsak said THAI is also staying with the scheduled delivery of six superjumbo A380s in late 2012, to profit from the high season. The six aircraft will service routes with heavy traffic and to airports with limited flight slots like London, Frankfurt and Paris.

To further cut expenses and raise revenue, THAI will also open bidding for its four A340-500s this month, targeting to reap about US$100 million (Bt3.5 billion) from each plane.

Narongsak said interest has been shown for its ultra-long-range aircraft, which used to ply the Bangkok-New York route. While the sale is underway, the aircraft now serve the Bangkok-Los Angeles and Bangkok-Oslo routes.

Earlier, THAI expected to lose about Bt4.2 billion from the four aircraft.