Mr. Areepong Bhoocha-oom, Chairman of the Board of Directors, Thai Airways International Public Company Ltd Annual General Shareholders’ Meeting 2016 unveiled the following results.
Thai Airways Int’l Operating Results for 2015 were deeply influenced by the Transformation Plan approved by the State Enterprise Policy Committee on 26 January 2015. The Transformation Plan in the first phase aimed to stop the airline’s financial bleeding by reducing flight frequencies and/or discontinuing non-profitable routes, cutting unnecessary cost items, generating revenue by adjusting sales strategies, increasing ancillary revenues and enhancing product and services competitiveness.
The carrier received seven new aircraft while decommissioned 15 aircraft following its fleet rationalization strategy. Total aircraft in the fleet now stands at 95 as of 31 December 2015 compared to 102 aircraft at the end of 2014.
Nevertheless, the network rationalization strategy resulting in adjusting flight frequency and change of aircraft to match the passenger demand helped increasing aircraft utilization. The Available Seat-Kilometer was up by 0.6%, while the Revenue Passenger-Kilometer jumped by 6.5%. >The cabin load factor reached on average 72.9% compared to 68.9% in 2014. The airline saw the total number of passengers jumping by 11.3% to reach 21.25 million passengers or an increase of 11.3% from the previous year.
Strictly following the strategic and transformation plans which were closely monitored by the Management and Board of Directors, Thai Airways International and its subsidiaries reported a 2015 operating loss of THB 1,304 million from airline business, compared with THB 21,715 million or 93.4% improvement from the same period the previous year due mainly to 11.2% total expense reduction on the back of fuel expense and non-fuel expense resulting from cost management initiatives. Total revenue declined by 1.2% from 2014 mainly from 1.5% reduction in passenger revenue and 21.0% reduction in freight revenue. The main reasons for revenue decline were due to higher competition, drop in fuel surcharge and strength in the Baht compared to major currencies. Last year, total net loss was THB 13,047 million.
In 2015, six strategies were implemented, as follows:
1. Route network strategy
2. Fleet strategy: by selling decommissioned aircraft
3. Commercial strategy: to increase revenue efficiency
4. Operations and cost strategy
5. Human resource management
6. Manage the Company and subsidiaries as well as business units
In 2016, the Company’s focus is on “strength building” in order to improve its abilities to compete by concentrating on the following four areas:
• Generate revenue
• Effective cost reduction
• Build sustainable capability
• Customer service excellence