Thai Airways shares soar to seven-year high after earnings jump

[BANGKOK] Thai Airways International’s shares climbed to the highest level in almost eight years after the state-controlled airline reported that net income for the second quarter soared nearly 39-fold from a year earlier.

The carrier rose as much as 10.5 per cent on Friday (Aug 8) to the highest intraday level since October 2018, extending its weekly gains to almost 340 per cent. Its market value has reached more than 407.5 billion baht (S$16.2 billion), making it the fifth-largest carrier in Asia, according to data compiled by Bloomberg.

Thai Airways’s shares resumed trading on Monday for the first time in five years. The company in June exited a court-supervised debt rehabilitation as the post-Covid travel demand boom enabled it to achieve an earnings turnaround and sell new shares to raise capital.

The flag carrier’s second-quarter net income surged to 12.1 billion baht from 306 million baht a year earlier on lower finance costs and several one-off items, including a gain from termination of aircraft lease agreements. Revenue rose to 51 billion baht, a 14 per cent jump from a year earlier.

Thai Airways’ cost-cutting programme and declining fuel prices have given the carrier strong financials for now, according to Eric Zhu, an aviation and defence industry analyst at Bloomberg Intelligence.

However, the slump in Thai tourism could weigh on the carrier in the future, he said. “One has to wonder if they can sustain growth this year given the bleak tourism outlook,” Zhu said.

Its resumption of trading marked the airline’s return to normal business operations after it had accumulated more than 400 billion baht of debt in the lead up to the pandemic that ravaged the global travel industry. BLOOMBERG