Bangkok–25 Feb–Thai Airways
Thai Airways International Public Company Limited (THAI) held a Board of Directors’ Meeting chaired by Mr. Ampon Kittiampon, THAI Chairman, at THAI Head Office with the following announcements.
1. Operating Results for 2010
The THAI Board of Directors acknowledged the operating results for 2010 year as follows:
From the period beginning January to end of December 2010, THAI successfully implemented the strategic plan to build a solid foundation for the organization’s business even though during the year THAI was affected by several key events. The volcanic eruptions in Iceland in April 2010 caused the European airspace to be closed, affecting THAI’s operations to Europe, after which, Thailand faced internal political protests from mid April to May 2010 that impacted travel-related businesses in the country. Nonetheless, the company’s operating profit in 2010 increased from the previous year in 2009, as a result of THAI’s intensive business strategy and adjustment to the work plan in proactively reacting to the continuously changing situations, as well as the key events having subsided by the third quarter.
Hence, in 2010 THAI’s total revenue was 184.3 billion baht, an increase by 20.4 billion baht from 2009, or an increase of 12.4%. The Company’s operating revenue increased by 19 billion baht, or 11.7%. The expenses, which do not include gains/losses on foreign currency exchange, but include sharing of profits of investments by the equity method and finance costs, were 175.9 billion baht which was 16.9 billion baht higher than expenses in 2009, or 10.6% higher, due to a higher average price of jet fuel by 26.4%. The increase in production and traffic combined with the higher personnel costs, partly as a result of the Company having implemented the strategy for employee management through the Gold Handshake and Mutual Separation Plan projects, came to a total of 2.3 billion baht, which also included a three-month bonus scheme for 2010 fiscal year. These costs are not regular operating costs. This strategy of the Company’s human resource management would help to reduce the long-term costs for employees.
In addition, in 2010 THAI had gains on foreign currency exchange of 9.1 billion baht, which was an increase by 5.9 billion baht, or by 187.5%. THAI had a profit before income tax of 17.5 billion baht, which was an increase of 9.4 billion baht, or 116.1%. The company had profits before foreign currency exchange and income tax of 8.4 billion baht, which was an increase of 3.5 billion baht, or 70.4%.
The net profit was 15.4 billion baht or 8.39 baht per share, higher than that of 7.3 billion baht or 4.32 baht per share in 2009. EBITDAR was 33.3 billion baht, which was 1.4 billion baht or 4.4% higher than the previous year.
2. Operating Results for January 2011
The THAI Board of Directors acknowledged the operating results for January 2011 as follows:
Available Seat-Kilometer (ASK) for January 2011 was 2.1% higher than in January 2010. Revenue Passenger-Kilometer (RPK) for January 2011 was 3.1% lower than in January 2010. Cabin Factor averaged at 77.8%.
For Cargo and Commercial Mail, Available Dead Load Ton-Kilometers (ADTK) for January 2011 was 11.6% higher than in January 2010. Revenue Freight Ton-Kilometers (RFTK) for January 2011 was 9.9% higher than in January 2010. Freight Load Factor averaged at 53.7%.
3. THAI Shareholder Dividend for 2010
The THAI Board’s resolution on the 2010 dividend, for the period 1 January — 31 December 2010, of 1.25 baht per share is to be submitted to the Shareholders at the 2011 Annual General Shareholders Meeting, with the dividend payment being made by 20 May 2011.
4. 2011 Annual General Shareholders Meeting
THAI’s Board of Directors approved for the Company to hold its Annual General Shareholders’ Meeting on Wednesday, 27 April 2011, at 13.30 hours, at the Makawan Rangsan Room, Royal Army Club, Vibhavadi Rangsit Road. Shareholders who are entitled to attend the Annual General Shareholders’ Meeting will be determined on Tuesday, 15 March 2011 in accordance with Section 225 of the Securities and Exchange Act 1992. The closing of the Shareholders’ Registration book will take effect on Wednesday, 16 March 2011.
5. Financial Advisors and Underwriters for Thai Baht Debentures
THAI’s Board of Directors approved the appointment of Bangkok Bank Public Company Limited and Kasikorn Bank Public Company Limited as Financial Advisors and Underwriters for the issuance of 8 billion baht domestic debentures to be issued by May 2011.
6. Aircraft Acquisition Plan 2011-2022
THAI’s Board of Directors approved of the following aircraft acquisition plan:
Approved the aircraft acquisition plan 2011-2017 for 37 aircraft that include 11 narrow-bodied aircraft, 26 wide-bodied aircraft, for intercontinental and regional routes, and spare engines, at approximately 216.1 billion baht. Approved of the aircraft acquisition plan 2018-2022 for 38 wide-bodied aircraft for intercontinental and regional routes, including spare engines, at approximately 241.1 billion baht. The number of aircraft acquired through firm order is 21 aircraft, and optional order is 17 aircraft.
The acquisition plan 2011-2022 for new aircraft is according to the corporate strategic plan 2011-2017, to support the Company’s route network and fleet for improved efficiency, to replace ageing aircraft, and increase fleet size for traffic growth. This aircraft acquisition investment is an addition to previously approved orders consisting of 26 aircraft awaiting delivery: five Airbus A330-300 (pending installation of seats by ZIM Company Limited), six Airbus A380-800, seven Airbus A330-300, and eight Boeing 777-300ER; in addition to 21 aircraft to be decommissioned there are eight Airbus A300-600, six Boeing 747-400, three 777-300ER with aircraft leases to expire, and the return of four Boeing 737-400 leased to Nok Air after the lease expires.
The overall goal in this round of aircraft acquisition plan is to modernize THAI’s fleet and to have younger aircraft, in line with other commercial airlines. The average fleet age will be reduced from 11.9 years in 2010 to an average age of 8.5 years in 2017, with improved fleet productivity, reduced jet fuel consumption at an average of 1.3 percent per year, reduced carbon emissions at an average of 1.5 percent per year, and reduced aircraft maintenance costs at an average of 3.2 percent per year. Most importantly, these new aircraft will be equipped and fitted with new and comfortable seats along with çağıl in-flight entertainment systems that meet customers’ needs.
7. THAI Freighter Aircraft Plan
THAI’s Board of Directors approved THAI’s Freighter Aircraft Acquisition Plan to convert two decommissioned Boeing B747-400 aircraft, between 15-20 years, into freighter aircraft for THAI’s cargo and commercial mail aircraft fleet by the second quarter of 2012.
8. THAI to Recruit New Cabin Crews in 2011
THAI’s Board of Directors approved the 2011-year recruitment of 468 new cabin crew, comprising 187 male and 281 female cabin attendants. Of the female cabin attendants, there will be 248 Thais, 28 Japanese and 5 Koreans.
THAI will start the recruitment and selection process for Thai cabin attendants first, starting in March 2011, followed by the recruitment and selection of Japanese and Korean cabin attendants. For more information, please visit www.thaiairways.com.
THAI Board of Directors approved the reorganization at the Executive Vice President level as follows.
Product and Customer Services Department, Executive Vice President Level to oversee product development and overall customer services. The Product and Customer Services Department shall ensure all touch points services are efficiently delivered to our passengers, and also seek new opportunities for the Company’s business development.
Departments under Product and Customer Services:
1.1 Product and Services Development, Vice President
1.2 Customer Service Management and Relations, Vice President
2. Corporate Secretariat Department, Executive Vice President Level to oversee the Company’s legal and corporate governance. The Corporate Secretariat will coordinate between the Company’s shareholders and Board of Directors, and will also ensure that the company’s legal, rules and regulations are in compliance with the Securities and Exchange Commission’s laws and regulations.
Departments under Corporate Secretariat:
2.1 Legal and Compliance, Vice President
2.2 General Administration, Vice President
Human Resource Department, Executive Vice President Level to focus on human resources management and development in accordance with the company’s human capital and the organization’s effectiveness strategy
Departments under Human Resource Department:
3.1 Human Resources Management, Vice President
3.2 Personnel Development and Training, Vice President
10. Management Appointments and Transfers
THAI’s Board of Directors approved the appointments and transfers below.
10.1 Mr. Niruj Maneepun, Vice President, Legal and Compliance Department, as Executive Vice President, Corporate Secretariat
10.2 Mr. Sathok Varasarin, Managing Director, Catering Department, as Executive Vice President, Human Resources and General Management
10.3 Mr. Teerapol Chotichanapibal, Vice President, Commercial Development and Support Department, as Executive Vice President, Product and Customer Services
10.4 Mr. Danuj Bunnag, Vice President, Market Planning/Revenue Planning Management Department, as Managing Director (Executive Vice President level), Ground Service Business Unit
10.5 Flt. Lt. Sopit Pokasoowan, Special Advisor, Office of the Executive Vice president Strategy & Business Development, as Vice President, Risk Management Department
10.6 Mr. Chalongchai Hiranyalekha, Director Revenue and Market Strategic Planning Department, as Vice President, Market Planning/Revenue Management Department