Political strife to dent Thai Airways’ revenue

September 11, 2008

Political strife to dent Thai Airways’ revenue
Thai Airways International expects its revenue this year to drop from the 174 billion baht ($5 billion) it earned last year due to political problems in Thailand that have hit tourism, reported Reuters.

"This year's revenue will surely drop from last year due to the current political unrest triggering flight cancellations," President Apinan Sumanaseni told reporters.

The national carrier also expected its "cabin factor" -- the percentage of seats sold -- to drop in 2008 from an average 77 percent last year, Apinan said.

So far this month, the airline's cabin factor is at only 60 percent, compared with 75-80 percent a year earlier. Passenger numbers from Europe fell 5-10 percent from the previous month and those from Asia showed a 20 percent drop, he added.

The airline said last week passengers, particularly from Japan, South Korea and China, were cancelling flights after several governments issued travel warnings when the government imposed emergency rule in Bangkok to control political unrest.

On Tuesday Prime Minister Samak Sundaravej was forced to step down after a court ruled there was a conflict of interest when he was paid to host a cooking programme on commercial TV while in office.

"If the political turmoil goes on, our third quarter will be in trouble, and that will continue into the fourth quarter, when it is our high season," Apinan said.

The airline was planning to cut costs, including cutting back on flights, to cushion the drop in revenue, he added.

Thai Airways, already hit hard by surging fuel costs, reported a net loss of 7.04 billion baht in the first half of 2008, partly due to a foreign exchange loss, and it earned 105 billion baht in revenue.

Thai Airways shares closed unchanged at 14.80 baht on Wednesday, when the overall Thai main index fell 1.22 percent.