PROFITS AT THAI Airways International fell by 25% in the first half of the carrier's financial year, with the blame largely being laid on a higher wage bill resulting from its staff reorganisation.
The airline, which staged a recovery a year ago, has now seen net profits drop back to 1.70 billion baht ($69 million) over the six months to the end of March. The drop came despite a 13% rise in revenues to more than 36 billion baht.
Thai blames the drop in earnings on a 23% hike in staff costs, because of a new salary structure and larger work force. Financial analysts say that another contributing factor has been the strength of the Japanese yen which has had a heavy impact on the yen-loans used predominantly by Thai to finance new aircraft purchases.
It also cites a change in accounting policy, affecting the way that it handles discounts earned on new-aircraft purchases. These savings will still be counted as income, but spread over an aircraft's 14-year life, instead of in a lump sum at the time of acquisition.
Source: Flight International