Annual Report 2010 Thai Airways International Public Company Limited Contents

Total Page:16

File Type:pdf, Size:1020Kb

Annual Report 2010 Thai Airways International Public Company Limited Contents Annual Report 2010 Thai Airways International Public Company Limited Contents Message from the Chairman 2 Message from the President 4 THAI’s Performance and Operations 2010 7 Financial Highlights 11 Operations of The Company and its Subsidiaries - The Policies of Associated Companies 12 Results of Operations 15 Changes in Business Operations 16 Subsidiaries Affi liated Companies 50 Compliance with The Offi cial Information Act, B.E.2540 53 Commercial Airline Industry Outlook 55 Risk Management and Risk Factors 57 Shareholders and Management Structure 61 Good Corporate Governance Committee Report 78 Good Corporate Governance 79 Related Parties 104 Management's Discussion and Analysis 112 Business Direction and Corporate Strategy 126 Five - Year Financial Review 128 Board of Director's Duties on Financial Disclosure 129 Summary of the 2010 Annual Activities of the Audit Committee 130 Auditor's Report 133 Financial Statements 134 Notes to The Financial Statements 141 General Information 172 Board of Directors 174 Management Team 178 Thai On-line Offi ce Addresses 180 1 0001-18201-182 ppc3.inddc3.indd 1 118/4/25548/4/2554 99:59:12:59:12 Message from the Chairman I am committed to building a strong and sustainable future for THAI through sound operations in order to ensure solid growth and maintain the country’s national treasure for the Thai people. 2 001-182 pc3.indd 2 18/4/2554 9:59:13 Annual Report 2010 Thai Airways International Public Company Limited 2010 proved to be another challenging year that may impact on the Company’s performance. for the commercial airline industry. Despite the global Strengthening the Company’s capital structure was economic uncertainty, natural disasters, increased another successful area of focus, bringing greater competition especially from the rapid proliferation of fi nancial stability to the Company. Human resource low cost airlines, as well as domestic political unrest, development programs and improved operating THAI was able to successfully weather these challenges procedures with special emphasis on loyalty and with unifi ed support from both the management and transparency in accordance with the Company’s Good employees. The implementation of effective operating Corporate Governance were implemented. As the and risk management strategies has been an essential National Flag Carrier, THAI fully recognizes the factor in strengthening THAI’s performance and importance of corporate social responsibility (CSR) in development. supporting its brand and maintaining confi dence This year, THAI celebrated its 50th Anniversary among all stakeholders. while establishing the Company’s long-term vision It is with great pride that I am able to announce “Mission TG100” to reposition THAI at the forefront of to shareholders that despite all the diffi culties and the commercial airline industry placing special challenges encountered in 2010, the Company’s emphasis on customer oriented service, enhanced effective strategies coupled with the commitment and competitiveness and being dynamic. THAI assessed its sacrifi ces made by every THAI employee, enabled THAI competitive positioning and thus began to focus on to accomplish its goals and achieve a strong fi nancial strategies to improve products and services and to performance. The growing confi dence in the Company further enhance customer value at every customer is refl ected in THAI’s share price that dropped to the touchpoint. The Company sought new business lowest point of about 6.40 baht in early 2009 and opportunities and took initiatives to expand the reached a high of 57.75 baht in 2010. Company’s horizon. Simplifying and acquiring the I would like to take this opportunity on behalf most appropriate aircraft fleet for THAI’s future of the Board of Directors to commend the employees network is essential in order to become cost effective. of THAI for their dedication and cooperation and to Modernized information technology and advanced thank customers, business partners, and all tools are imperative in this highly competitive industry. stakeholders, especially the Company’s shareholders, In parallel with other activities taking place, cost for their confi dence and unwavering support for THAI. control remains at the heart of management strategy, Along with all members of the Board of Directors, I but without any sacrifi ce in service quality. am committed to building a strong and sustainable To mitigate the potential impact of various future for THAI through sound operations in order to risks, THAI mandated a robust and consistent approach ensure solid growth and maintain the country’s to fuel hedging while being observant of other risks national treasure for the Thai people. (Mr. Ampon Kittiampon) Chairman 3 001-182 pc3.indd 3 18/4/2554 9:59:14 Message from the President For half a century, THAI has earned numerous honors and commendations from leading organizations both within and outside Thailand and continues to receive global recognition for its unique service incorporating the Thai identity and graceful hospitality that is found nowhere else in the world. 4 001-182 pc3.indd 4 18/4/2554 9:59:14 Annual Report 2010 Thai Airways International Public Company Limited 2010 marks a historic milestone in the history held communication devices, and the automated of THAI as we celebrate 50 successful years as the information system (e-Service) enabling customers to National Flag Carrier of the Kingdom of Thailand, purchase THAI tickets, perform online check-in, access while playing a key role in bringing Thailand to the flight and mileage program information to meet world arena. For half a century, THAI has earned modern lifestyle expectations. Efforts were made to numerous honors and commendations from leading further enhance effi ciency at customer call centers organizations both within and outside Thailand and and increase the ticket distribution channels through continues to receive global recognition for its unique THAI’s website. As of December 2010, the proportion service incorporating the Thai identity and graceful of revenue from internet passenger ticket sales to total hospitality that is found nowhere else in the world. passenger revenue ticket sales was 8.8 percent This year, THAI achieved its goals set forth in the compared to 6.0 percent at year-end 2009. Service Company’s fi ve-year plan under “Mission TG100” with improvements at Suvarnabhumi Airport, including successful strategies for the various operating units both ground services and food and beverage services resulting in a satisfactory financial performance. at THAI’s premium class lounges, have earned THAI Despite domestic challenges and natural disasters recognition as the Best Ground Service and Best First overseas, THAI was able to maintain confi dence among Class Lounge by Skytrax. The arrival of baggage within its creditors, shareholders and customers, while 15 minutes after fl ight landing for First Class passengers building stability and positioning itself among the was also a factor in the Skytrax award. world’s leading carriers. As for route network development to meet While the operating environment of the customer demand, in 2010 THAI launched direct commercial airline industry remains in a constant service on the Bangkok - Haneda (Tokyo, Japan) and state of fl ux and subjected to a broad range of risks, Bangkok - Johannesburg (South Africa) routes, and had THAI’s “Mission TG100” vision places special emphasis Nok Air operate on routes to certain domestic on three core values – being customer oriented, being destinations. competitive and being dynamic. In the past year, a To further improve aircraft fl eet effi ciency, change in strategic direction was undertaken with THAI will be acquiring 15 new aircraft comprising eight planning to provide a comprehensive air transport Boeing 777-300ER aircraft and seven Airbus A330-300 service to meet the needs of all customer groups, aircraft. These aircraft will be delivered to THAI’s fl eet focusing in particular on the fast-growing low cost between 2010 and 2014. In addition, three aircraft sector. This will enable THAI to expand its business retrofi t programs will also be undertaken for six Boeing reach and enhance operational competitiveness 747-400 aircraft (no.7-12), eight Boeing 777-200 through a wider product range in anticipation of future aircraft and six Boeing 747-400 aircraft (no. 13-18). regional open skies. The programs will be completed by 2013. Three Improvements were made at every customer additional Boeing 777-300ER aircraft have been leased touch point in response to customers’ demand as well since mid 2010. To enhance THAI’s competitiveness in as to further enhance the customer experience and the area of cargo service, two Boeing 777-200LRF overall satisfaction. These include the introduction of dedicated freighter aircraft were leased on a blocked- Web on Mobile service providing information via hand space basis from March 2010, to help increase cargo 5 001-182 pc3.indd 5 18/4/2554 9:59:15 capacity and revenue. Although THAI encountered units have been separated from core operations to problems when KOITO Industries failed to deliver enhance responsibility and accountability in managing economy class seats for fi ve of THAI’s brand new A330- profi tability with corresponding empowerment for 300 aircraft, another seat supplier, ZIM FLUGSITZ decision making. GmbH, was commissioned to resolve the problem. A The capital restructuring plan in 2010 helped long-term fleet plan was also drafted to acquire THAI regain its fi nancial strength
Recommended publications
  • January 08-11 Pp01
    ANDAMAN Edition Volume 18 Issue 2 January 8 - 14, 2011 Daily news at www.phuketgazette.net 25 Baht Booze ban hits park tourists Teen stabbing sparks alcohol ban in national parks By Atchaa Khamlo derstand and have given us very Standard procedure is for staff good co-operation. The situation to ask people trying to bring alco- THE directors of several national is under control,” he said. hol into the park to leave it with parks in the Andaman region say Most of those warned about officers during their visit, he said. they have received good compli- drinking in the park were Thais, “We prefer to ask people for ance with the ban on alcohol in- but a few were foreigners. their co-operation rather than side parks that came into effect “As the park is quite expansive, threaten them with punishment. It on December 27. sometimes people might be drink- seems our public relations cam- Natural Resources and Envi- ing inside without our being aware paign is going well, as most people ronment Minister Suwit Khunkitti of it,” he added. just drink Coke or water,” he said. issued the ban immediately follow- Two signs declaring the park “Most foreigners understand ing the December 26 stabbing an alcohol prohibition zone are quite well. Not many of them drink murder of a student by a group of now being constructed and should whiskey, but some like to drink drunken schoolmates camping at go up at both entrances very soon, beer. But they don’t seem to have Khao Yai National Park in Surat along with a third sign to go up in any problem with alcohol being Thani.
    [Show full text]
  • Thai Airways and Tiger Airways Form New Low-Cost Airline
    Thai Airways and Tiger Airways form new low-cost airline THAILAND. Thai Airways International, Thailand’s national airline, and budget carrier Tiger Airways have announced the joint formation of a new low-cost airline called Thai Tiger Airways. The new airline will operate the same low-fare, low-cost model as the other airlines in the Tiger Airways Group, and is expected to commence operations in the first quarter of 2011, pending regulatory approvals. Based in Bangkok, Thai Tiger will operate international and domestic flights out of Bangkok’s Suvarnabhumi Airport offering short-haul, point-to-point services within a five-hour flying radius. The route network and further information on the corporate structure will be announced in due course. Thai Airways President Piyasvasti Amranand said: “We are pleased to partner with Tiger Airways in establishing Thailand’s newest airline, Thai Tiger. With its disciplined approach to the low-cost model, Tiger Airways has proven that it has the right approach to competing effectively in the growing low fare travel market in Asia. “For people in Thailand and the region, our launching Thai Tiger will mean that in addition to the global network of premium services operated by Thai Airways, more people will have access to new low-fare point-to- point services, giving a big boost to tourism and employment.” Thai Aiways President Piyasvasti Amranand (left) and Tiger Airways Group President and CEO Tony Davis (right) announce the signing of a Memorandum of Understanding to form a new low-cost airline called Thai Tiger Airways Thai Airways and a Thai entity will collectively hold 51% while Tiger Airways will hold 49%.
    [Show full text]
  • Airports of Thailand Plc. for 1St Quarter of Fiscal Year 2016 (October – December 2015)
    Airports of Thailand Plc. For 1st Quarter of Fiscal Year 2016 (October – December 2015) Investor Relations Department, E-mail: [email protected], Tel: (662) 535-5900, Fax (662) 535-5909 Disclaimer This presentation is intended to assist investors to better understand the company’s business and financial status. This presentation may contain forward looking statements relate to analysis and other information which are based on forecast of future results and estimates of amounts not yet determinable. These statements reflect our current views with respect to future events which relate to our future prospects, developments and business strategies and are not guarantee of future performance. Such forward looking statements involve know and unknown risks and uncertainties. The actual result may differ materially from information contained in these statements. 2 Airports in Thailand MAE FAH LUANG-CHIANG RAI Total of 38 airports INTERNATIONAL AIRPORT CHIANG MAI INTERNATIONAL Airports of Thailand Public Company Limited 1 AIRPORT . 2 in Bangkok and perimeter Pai Mae Hong Son o Suvarnabhumi Airport (BKK) Nan Lampang o Don Mueang International Airport (DMK) Phrae Udon Thani . 4 international airports at regional sites Sukhothai Nakhon Phanom Tak Loei Mae Sot Sakon Nakhorn o Chiang Mai International Airport (CNX) Phitsanulok Khon Kaen Phetchabun o Phuket International Airport (HKT) Roi Ed DON MUEANG o Hat Yai International Airport (HDY) INTERNATIONAL Surin 2 AIRPORT Buri Ram Ubon Ratchathani o Mae Fah Luang-Chiang Rai International Airport
    [Show full text]
  • Air Connectivity in Archipelagic Southeast Asia: an Overview
    Air Connectivity in Archipelagic Southeast Asia: An Overview The archipelagic region of Southeast Asia consists of 24,000 islands, spread across 5,200 kilometers (kms) from east to west and 3,400 kms from north to south, with a population of about 350 million. Many of the islands are poor, remote from main centers of economic activity, and not well connected. Improving air connectivity can be instrumental in reducing development gaps. The paper examines the importance of improving air connectivity, and the state of the airline industry and the related infrastructure in the region. Special attention is paid to regional policies relating to air transport, and the paper concludes with policy Southeast Asia recommendations. Working Paper Series About the Asian Development Bank ADB’s vision is an Asia and Pacic region free of poverty. Its mission is to help its developing member countries substantially reduce poverty and improve the quality of life of their people. Despite the region’s many successes, it remains home to two-thirds of the world’s poor: 1.8 billion people who live on less than $2 a day, with 903 million struggling on less than $1.25 a day. ADB is committed to reducing poverty through inclusive economic growth, environmentally sustainable growth, and regional integration. Based in Manila, ADB is owned by 67 members, including 48 from the region. Its main instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical assistance. Air Connectivity in Archipelagic Southeast Asia: An Overview Keith Trace, Barend Frielink, and Denis Hew No.
    [Show full text]
  • Thai Airways
    Thailand Company Focus Thai Airways Bloomberg: THAI TB | Reuters: THAI.BK DBS Group Research . Equity 18 Jan 2011 BUY Bt44.75 SET : 1,023.19 Strong momentum in FY11F Price Target : 12-month Bt 64.50 Strong growth in FY11F with easing political Reason for Report : Post conference note uncertainty and supportive industry fundamentals. Potential Catalyst: Launching low cost airlines, and exit from SOE status. 4Q10F to soften but momentum will pick up ahead. Analyst Trading at 1.1x P/BV, below peers’ average of 1.6x; Nalyne Viriyasathien +662 657 7823 [email protected] maintain Buy rating for upside to Bt64.50 TP Positive response from investors. Mr. Raj Tanta-Nanta (VP) represented THAI at our DBSV POA Conference in Singapore on 13 Jan11 with excellent investors’ response. THAI will focus on expanding yields, fleet modernization, Price Relative improve fuel-hedging, exiting from SOE status and launch of low cost airlines to capture the lower income market. Bt Relative Index We expect FY11F core profit to grow 37% y-o-y to 220 55 . 80 Bt12.4bn as easing political uncertainty and an improving 45 . 80 170 economy will boost operations. 35 . 80 120 25 . 80 What would have been the 70 A softer 4Q10F but still decent. 15 . 80 peak season was unfortunately affected by flooding in many 5 . 80 20 parts of Thailand in Oct-Nov10, hance lowering travel 2007 2008 2009 2010 2011 demand and driving cabin load factors down to 73.8% (vs Thai Airways ( LHS ) Relative SET INDEX ( RHS ) 75.4% a year ago).
    [Show full text]
  • At Suvarnabhumi Airport – FY2016
    Airports of Thailand Plc. For 6 Months of Fiscal Year 2017 (October 2016 – March 2017) Investor Relations Department, E-mail: [email protected], Tel: (662) 535-5900, Fax (662) 535-5909 Disclaimer This presentation is intended to assist investors to better understand the company’s business and financial status. This presentation may contain forward looking statements relate to analysis and other information which are based on forecast of future results and estimates of amounts not yet determinable. These statements reflect our current views with respect to future events which relate to our future prospects, developments and business strategies and are not guarantee of future performance. Such forward looking statements involve know and unknown risks and uncertainties. The actual result may differ materially from information contained in these statements. 2 Airports in Thailand MAE FAH LUANG-CHIANG RAI Total of 38 airports INTERNATIONAL AIRPORT CHIANG MAI INTERNATIONAL Airports of Thailand Public Company Limited AIRPORT . 2 in Bangkok and perimeter Pai Mae Hong Son o Suvarnabhumi Airport (BKK) Nan Lampang o Don Mueang International Airport (DMK) Phrae Udon Thani . 4 international airports at regional sites Sukhothai Nakhon Phanom Tak Loei Mae Sot Sakon Nakhorn o Chiang Mai International Airport (CNX) Phitsanulok Khon Kaen Phetchabun o Phuket International Airport (HKT) Roi Ed DON MUEANG o Hat Yai International Airport (HDY) INTERNATIONAL Surin * AIRPORT Buri Ram Ubon Ratchathani o Mae Fah Luang-Chiang Rai International Airport (CEI)
    [Show full text]
  • WASHINGTON AVIATION SUMMARY September 2010 EDITION
    WASHINGTON AVIATION SUMMARY September 2010 EDITION CONTENTS I. REGULATORY NEWS................................................................................................ 1 II. AIRPORTS.................................................................................................................. 5 III. SECURITY AND DATA PRIVACY ……………………… ……………………….……...7 IV. E-COMMERCE AND TECHNOLOGY......................................................................... 9 V. ENERGY AND ENVIRONMENT............................................................................... 10 VI. U.S. CONGRESS...................................................................................................... 11 VII. BILATERAL AND STATE DEPARTMENT NEWS .................................................... 13 VIII. EUROPE/AFRICA..................................................................................................... 14 IX. ASIA/PACIFIC/MIDDLE EAST .................................................................................16 X. AMERICAS ............................................................................................................... 18 For further information, including documents referenced, contact: Joanne W. Young Kirstein & Young PLLC 1750 K Street NW Suite 200 Washington, D.C. 20006 Telephone: (202) 331-3348 Fax: (202) 331-3933 Email: [email protected] http://www.yklaw.com The Kirstein & Young law firm specializes in representing U.S. and foreign airlines, airports, leasing companies, financial institutions and aviation-related
    [Show full text]
  • SIA Engineering Company and Nokscoot Airlines Incorporate Line Maintenance Partnership (Thailand)
    SIA Engineering Company and NokScoot Airlines Incorporate Line Maintenance Partnership (Thailand) SINGAPORE, 10 July 2019 – Mainboard-listed SIA Engineering Company Limited (“SIAEC”) wishes to announce that it and NokScoot Airlines Co., Ltd (“NokScoot”) have incorporated a line maintenance joint venture company, Line Maintenance Partnership (Thailand) Company Limited, in Thailand. This follows SIAEC’s announcement on 29 March 2019 that it had entered into a joint venture agreement with NokScoot to form a line maintenance joint venture based in Thailand. The details of the joint venture company are as follows: Name of joint venture company: Line Maintenance Partnership (Thailand) Company Limited Issued Share Capital: THB 63,680,000 comprising 636,800 ordinary shares The share capital of the joint venture company will be fully paid up by SIAEC and NokScoot in due course. Shareholding: 51% held by NokScoot, 49% held by SIAEC The joint venture company will commence operations in Don Mueang International Airport. With this addition, SIAEC will have a portfolio of 25 joint ventures across 8 countries with leading OEMs and other strategic partners. NokScoot is an associate of Singapore Airlines (“SIA”), as it is 49% owned by Scoot Tigerair Pte Ltd. Scoot Tigerair Pte Ltd is wholly-owned by Budget Aviation Holdings Pte Ltd, which is a wholly-owned subsidiary of SIA. Mr Ng Chin Hwee, a Director of SIAEC, also sits on the board of NokScoot as a representative of SIA. The incorporation of the joint venture company is not expected to have a material impact on the earnings per share or the net tangible assets per share of SIAEC for the financial year ending 31 March 2020.
    [Show full text]
  • Challenging Times for Asia-Pacific Airlines
    S U N DAY 1 I SUNDAY I 12 OCTOBER 2008 D A Y BRINGING YOU THE NEWS FROM THE 14TH WORLD ROUTE DEVELOPMENT FORUM IN KUALA LUMPUR r e n r a Changed G A little y o R / s atmosphere e r bit of u t a e f to permeate x e Eastern R © Routes Promise BY KERRY EZARD This year’s Routes moves to Asia for the first time, but the location of the event will not be the only thing that is different. This stunning The atmosphere is expected to picture of an be markedly changed from last ornate temple in year’s event in Stockholm as the terminal at Bangkok’s new high oil prices and the global airport sets the economic slowdown continue scene for to blight the airline industry, Routes’ first as Routes chairman Mike foray into the Howarth explains. Far East. “Obviously things are very different from last year. Last year the industry was still on a roll and lots of airlines were Challenging times for talking about new services,” said Howarth. However, he ex - pects that deals will still be done at this year’s conference Asia-Pacific airlines here in Kuala Lumpur as air - lines look towards the future and take advantage of the fail - BY KERRY EZARD Aviation (right). “The IATA chief economist ures of some of their rivals. sia-Pacific airlines are finding negatives are worst in Brian Pearce agrees that “Some carriers will still be there Athemselves hit harder than India, which in August Asia-Pacific airlines are talking about new air services most anticipated by the global saw a 17.3% downturn being hit harder than because some are still expand - economic slowdown.
    [Show full text]
  • Order 7340.1Z, Contractions
    U.S. DEPARTMENT OF TRANSPORTATION CHANGE FEDERAL AVIATION ADMINISTRATION 7340.1Z CHG 3 SUBJ: CONTRACTIONS 1. PURPOSE. This change transmits revised pages to change 3 of Order 7340.1Z, Contractions. 2. DISTRIBUTION. This change is distributed to select offices in Washington and regional headquarters, the William J. Hughes Technical Center, and the Mike Monroney Aeronautical Center; all air traffic field offices and field facilities; all airway facilities field offices; all international aviation field offices, airport district offices, and flight standards district offices; and the interested aviation public. 3. EFFECTIVE DATE. February 14, 2008. 4. EXPLANATION OF CHANGES. Cancellations, additions, and modifications are listed in the CAM section of this change. Changes within sections are indicated by a vertical bar. 5. DISPOSITION OF TRANSMITTAL. Retain this transmittal until superseded by a new basic order. 6. PAGE CONTROL CHART. See the Page Control Chart attachment. Nancy B. Kalinowski Acting Vice President, System Operations Services Air Traffic Organization Date: __________________ Distribution: ZAT-734, ZAT-464 Initiated by: AJR-0 Vice President, System Operations Services 02/14/08 7340.1Z CHG 3 PAGE CONTROL CHART REMOVE PAGES DATED INSERT PAGES DATED CAM-1-1 and CAM-1-10 10/25/07 CAM-1-1 and CAM-1-2 02/14/08 1-1-1 10/25/07 1-1-1 02/14/08 3-1-15 through 3-1-18 03/15/07 3-1-15 through 3-1-18 02/14/08 3-1-35 03/15/07 3-1-35 03/15/07 3-1-36 03/15/07 3-1-36 02/14/08 3-1-45 03/15/07 3-1-45 02/14/08 3-1-46 10/25/07 3-1-46 10/25/07 3-1-47
    [Show full text]
  • SIA Engineering Company to Form Line Maintenance Joint Venture in Thailand
    SIA Engineering Company to Form Line Maintenance Joint Venture in Thailand SINGAPORE, 29 March 2019 – Mainboard-listed SIA Engineering Company Limited (“SIAEC”) today announced that it has entered into a joint venture agreement with NokScoot Airlines Co., Ltd (“NokScoot”), to form a line maintenance joint venture based in Thailand. Under the agreement, NokScoot will hold an equity stake of 51% in the joint venture, with SIAEC taking the remaining 49% stake. The agreement is subject to the receipt of regulatory approvals. The joint venture will have an initial registration capital of THB63,680,000, or approximately S$2,740,000. NokScoot will subscribe for THB32,476,800, or approximately S$1,397,000, in cash and SIAEC will subscribe for THB31,203,200, or approximately S$1,343,000, in cash in the joint venture. The joint venture will commence operations in Don Mueang International Airport (DMK) and subsequently expand to other key airports in Thailand. Mr. Png Kim Chiang, Chief Executive Officer of SIAEC, said “We are delighted to partner NokScoot for this line maintenance joint venture in Thailand. The joint venture will allow SIAEC to support NokScoot’s growing fleet in Thailand and grow SIAEC’s existing network of Line Maintenance International (LMI) stations to 34 airports in 7 countries outside Singapore.” Mr. Yodchai Sudhidhanakul, Chief Executive Officer of NokScoot, said “We are excited to enter into this agreement which will further strengthen the partnership between our two companies. This joint venture is a significant milestone for us at NokScoot. It will help us to provide faster and more reliable line maintenance services to support our growth plan.” NokScoot is an associate of Singapore Airlines, as it is 49% owned by Scoot Tigerair Pte Ltd.
    [Show full text]
  • Thai Airways
    Thailand Company Focus Thai Airways Bloomberg: THAI TB | Reuters: THAI.BK DBS Group Research . Equity 1 Apr 2011 BUY Bt37.75 SET : 1047.48 Mitigating Japan impact Price Target : 12-month Bt 60.25 Reason for Report : Post non-deal roadshow note Positive response from investors at Europe NDR Potential Catalyst: Launching low cost airlines, exit from SOE status, and despite concerns over Japan impact and fuel prices drop in fuel price. Effective fuel hedging and timely surcharge Analyst adjustment to mitigate rising fuel prices; also Nalyne VIRIYASATHIEN +662 657 7823 implementing measures to offset lower Japan traffic [email protected] Continued strong growth momentum; maintain BUY for attractive valuation and 60% upside potential to Bt60.25 TP Price Relative With Japan contributing 11% Bt Relative Index Limited impact from Japan. 220 of passenger revenue, the recent turmoil in Japan affected . 55 80 THAI. But earnings should not be impacted substantially 45 . 80 170 because lower cabin factor on routes to Tokyo Narita and 35 . 80 120 Haneda (c. 50-60%) is being offset by robust cabin factor 25 . 80 70 (c.85%) on the remaining three Japanese routes to Fuguoka, 15 . 80 5 . 80 20 Nagoya and Osaka. These cities are further from the troubled 2007 2008 2009 2010 2011 Fukushima nuclear power plant. Meanwhile, THAI has Thai Airways ( LHS ) Relative SET INDEX ( RHS ) responded by cutting one flight/day to Tokyo Narita and increased frequency to Korea. Since the earthquake, THAI’s Forecasts and Valuation cabin factors on routes to China and Korea have edged FY Dec (Bt m) 2009A 2010A 2011F 2012F higher, implying the substitution effect.
    [Show full text]