Stimulus and new jets key to rebound
While analysts expect a weak second quarter for Thai Airways, there is reason for optimism in the second half.
The financial results of Thai Airways International (THAI) are expected to bottom out in the second quarter, while recently approved tourism stimulus efforts should help airlines in the second half even as renewed US-Iran tensions cause jet fuel prices to rise, say analysts.Thanapol Jiratanakij, an analyst at CGS International Securities (Thailand), said the flag carrier's management acknowledged that advance bookings softened in the second quarter amid the Middle East war, yet underlying travel demand remained resilient based on consistently high cabin factors despite industry-wide fare increases.
Passenger preferences shifted towards direct Asia-Europe flights, benefiting THAI's non-stop network, he said following a CGS-hosted luncheon of the airline's executives and institutional investors last week.
THAI reduced capacity below its original plan for May and June by trimming frequencies and deploying smaller planes on weaker routes to protect profitability.
