THAI AIRWAYS INTERNATIONAL PCL. COMPANY VISIT 1Q/2012

Transcription

1 THAI AIRWAYS INTERNATIONAL PCL. COMPANY VISIT 1Q/01 1

2 DISCLAIMER The information contained herein is intended to represent the Company s operating and financial position at a given point in time and may also contain forward looking information which only reflects expectations based on the prevailing geopolitical, economic and noncontrollable factors. Such information has been obtained from sources believed to be most reliable and the means in analyzing and preparation of such information for disclosure are based on approved practices and principles in the investment industry. The views are based on assumptions subject to various risks and uncertainties and no assurance is made as to whether such future events will occur, that projections will be achieved, or that the assumptions herein are correct. Consequently no assurance is made as to the accuracy or completeness of information presented in this document. This document should not be construed as an investment guide or as an offer or solicitation of an offer to buy or sell the Company s equity shares.

3 Company Facts Major Shareholders Major Shareholders HSBC (SINGAPORE) NOMINEES PTE LTD, 0.87% NORBAX INC., 13, 1.05% THE BANK OF NEW YORK MELLON, 1.33% GOVERNMENT SAVING BANK.39% NVDR, 4.57% STATE STREET BANK AND TRUST COMPANY, 0.7% VAYUPAK (KTAM), 7.56% OTHERS,.9% VAYUPAK (MFC), 7.56% MINISTRY OF FINANCE, 51.03% As of Mar Thailand s National Flag Carrier 51% directly, 68% indirectly owned by the Royal Thai Government Market Capitalization: 1,397 MUSD (As of Jan 01) 3

4 Company Facts Business Unit 4

5 Company Facts Airline Portfolio Premium Services Airline 55% 49% 49% 49% 49% Thailand 5

6 Snap Shot Jan.Sept. 0 MTHB USD mn. Equiv. % Change (YoY) Assets 77,044 8, % Total Revenue 147,371 4, % Net Profit (Exclude FX) 1, % 0 Jan.Dec. % Change YoY Passenger carried (Million) % Million Revenue Passenger Kilometers (MRPK) 55,67 0.7% Freight carried (tons) 689, % Million Revenue Freight Ton Kilometers (MRFTK), % # of Aircraft 89* Destinations Served 7 Countries Served 35 *Excluding 6 B leased to Nok Air 6

7 Financial Performance Ratios 9M/010 & 9M/0 Ratios units 9M/10 9M/ Earnings Per Share (THB) Net Profit (MTHB),958 4,809 EBIT (MTHB) 7, EBITDA (MTHB),658 15,57 Operating Profit Margin (%) Net Profit Margin (%)

8 Operating Summary Units 4Q/0 4Q/010 % % Change Jan.Dec. 0 Jan.Dec. 010 Change Passenger Production MASK 19,953 19, % 78,533 75, % Passenger Traffic MRPK 1,968 14,569.0% 55,67 55, % Cabin Factor % % % Passenger Yield* THB/km.75 (JanDec).57 (JanDec) +7.0% % Freight Production MADTK 1,10 1, ,919 4, % Freight Traffic MRFTK ,766, % Freight Factor % % Freight Yield* THB/km 9.89 (JanDec) 9.50 (JanDec) +4.1% % Avg. Fuel Cost USD/gallon (E) (E) % Note : Yield includes fuel surcharge 8

9 Factors Affecting Aviation Business Factors of Concern Natural Disasters Rate of Economic Growth Rapid Rise in Fuel Price FX Fluctuation EU Carbon Emissions Guideline Competition from LCCs / Traditional Airlines/ New Full Network Carriers THAI is taking precautionary actions to mitigate all risk factors ASEAN Open Sky and Liberalization Policy Health Availability of Aircraft Financing Availability of New Aircraft Acquisition, Aging Fleet & Seat New Aircraft Technology /Trend Global Politics 9

10 New Strong Competitors from Middle East Middle East HUB Emirates Qatar Etihad 10

11 THAI surrounded by LCC LCC Fleet Order Pacifi c Pacifi c AirAsia Cebu Pacific Indigo Jetstar Lion Air Silk Air SpiceJet Tiger Airways 17 Total Note: Fleets shown only effected to THAI Leased aircraft not included

12 Overarching Strategic Plan Ensure strength and stability Strengthen internal organization Build operational stability Build strategic competitiveness Seek growth opportunities Emphasize Customer Value Ensure Competitiveness Ensure Dynamism 1

13 Strategic Roadmap Overall Strategic Roadmap Core Value Striving together towards a strong and sustainable THAI Customeroriented Competitive Dynamic Strategic Transformation Areas Corporate Portfolio Strategy Customer Value Strategy Route Network and Fleet Strategy Commercial Strategy Corporate Social Responsibility Strategy IT Strategy Efficiency, Flight Safety and Fuel Management Strategy Human Capital & Organization Effectiveness Strategy Financial Strategy Ultimate Goal Restore THAI to be the pride of Thailand around the world, as a leading Asian carrier that is consistently among the top 3 carriers in Asia and top 5 in the world for overall customer experience 13

14 Strategy to close THAI s business gap THAI Smile to complement THAI s product offering Brand positioning matrix for THAI and affiliated companies Product Offering Premium full service Premium 3 class Premium class Premium regional (wide body) Class Class Launch July 01 No frills THAI LCC small* big connecting Regional Intercontinental Domestic Stage length Note: * NOK focuses on DMK only; ** Possibilities surrounding expanding fleet to include widebody aircraft will be evaluated as opportunities arise 14

15 Nok Airlines s Shareholder King Pow er International Group Co., Ltd 5% Siam Commercial Bank PCL 5% Mr.Suppapong Asvinvijit 5% 49% (The old proportion) Ladaw an Fund Co., Ltd. 6% King Power International Group Siam Co., Ltd. 6% Comm ercial Bank PCL. 6% Mr.Suppapong Asvinvijit 5% Mr. Patee Sarasin and Nok Air Management Co., Ltd. 30% Ladaw an Fund Co., Ltd. 6% Thaweetun Open Fund 5% Dhipaya Insurance PCL. 10% Thai Airw ays PCL. 39% Government Pension Fund 10% Mr. Patee Sarasin 5% Krung Thai Bank PCL. 10% 15

16 THAI Smile s Strategies THAI Smile s first flight will commence on July 1st, 01 after receiving first brand new aircraft in June 01 Brand new narrow body aircraft # of aircraft Positioning Differentiation Character Value Affordable Light Premium Good Price High Value BRAND Trendy Friendly Worthy Reliable Enjoyable Valuable Fleet Plan (01F18F)

17 Nok Air & THAI Smile Route Routes Network and Network Fleet Strategy Nok Air base at DMK, operates only domestic pointtopoint. Mae Hong Son Chiangmai THAI Smile base at BKK, operates in domestic and regional secondary routes and synchronize with TG network. Mae Sot Nan Udon Thani Loei Sakon Nakhon Nakon Phanom Phitsanulok Seoul Bangkok DMK Roi Et Buri Ram Ubon Ratchathani Amedabad Shenzhen Luang Prabang HongKong Hyderabad Hyderabad Yangon Macau Danang Kochi Bangkok Phuket Penang Kullalumpur Singapore Surat Thani Phuket Nakon Si Thammarat Trang Hat Yai Narathiwat 17

18 Current Fleet Current Fleet: 89 Aircraft 51% of O 9% of OL 40% of FL O=Owned OL=Operating lease FL=Financial lease (Note: Approximately) Aircraft Type A First Business Premium Economy Economy Total 36R1 6 N.A. 46 N.A N.A. 8 N.A A N.A O, 3 FL A N.A FL A N.A. 4 N.A N.A. 36 N.A B N.A. 1 N.A FL, 3 OL B N.A N.A B N.A. 30 N.A O, OL B77700ER 77E1 6 N.A. 30 N.A FL B Version # of Aircraft # of Seat N.A. 34 N.A TKE 1 N.A. 34 N.A Financial Method B777300ER N.A OL Total ,58 4,14 39 O, 38 FL, 1 OL O 10 O, 10 FL, OL O, 5 FL 6 FL Aircraft utilization:.7 hours/day (Jan. Nov. 1).4 hours/day (Jan. Nov. ) Note: Exc. of ATR7 4 of N.A.. = Not available) leased to Nok 18

19 Aircraft Delivery Plan NEW A/C DELIVERY TOTAL A (FL) 3 (FL) 6 B777300ER (OL) 6 (OL) 3 (FL) 3 (FL) 14 B777300ER (Jet Airways) 1+1 (OL) A (FL) 3 (FL) (FL) 1 A (FL) + (OL) (FL) + 6 (OL) 1 B7879 (OL) B (OL) (OL) 6 A30 4 (OL) (OL) (FL) 3 (FL) TOTAL Note : OL = Operating lease FL = Financial lease 19

20 Phase Out Plan PHASEOUT PLAN TOTAL B * 6 B777300ER (Jet Airways) 5 5 A A B77700 A A B ** 1** 3 9 ATR7 TOTAL Note : * To be converted to cargo planes ** Return from Nok Air 0

21 THAI Phuket Route Network Sector (as 31 OCT ) Copenhagen Phuket * Phuket Hong Kong vv. Phuket Seoul vv. Phuket Perth vv. Phuket Bangkok vv. Freq./Week 3 DAILY

22 Upgrades and Retrofit Schedule # of Aircraft First Business Economy Tentative Completion B No Retrofitted Retrofitted Jun. Dec. 0* (Four have been completed) B No Apr.Oct. 01 B77700 No. 1 1 Retrofitted Dec. 0 * B77700 No. 8 7 Retrofitted Mar. Dec. 01* * Note: Completion of retrofit has been postponed due to Don Mueang but will likely be completed by 01

23 New Aircraft A330 & A380 New Airbus A Royal First class New Airbus A Royal Silk Class Royal Silk Class Economy Class Economy Class 3

24 Aircraft lease to Supplement Capacity Leased 3 B777300ER aircraft from Jet Airways for 3 years Another B777300ER will be leased from Jet Airways : August and November 0 Used on European flights and to replace routes where older A aircraft flies in the region First Class Seats Business Class Seats High level of Privacy Economy Class Seats 4

25 Building Customer Value Ongoing enhancement and improvement in products and services at all touch points and the use of KPIs to ensure consistent quality service Food & Beverage Minimize Time for Baggage Claim Increase Selection of Entertainment Call Center Internet checkin with home print boarding pass EService Royal Orchid Plus Premium Lounges 5

26 Fuel Management Minimum 0% fuel hedging requirement to mitigate risk of rapid fuel cost rise Minimum 0% fuel hedging requirement to mitigate risk of rapid fuel cost rise Hedging Volume >80% Board Authority >60<=80% Fuel Price Risk Management Committee (President, EVP Finance & Accounting, VP, Director and Department) >30<=60% VP, Director and Department Level Decision >0<30% <=0% Board Authority 1m m 3m 4m 5m 6m 7m 8m 9m 10m m 1m 13m 14m 15m 16m 17m 18m >18 months Contract Period 6

27 Fuel Management Hedging combined with fuel surcharge greatly mitigates fuel price fluctuation risk Monthly fuel hedging 0080 % of consumption by month Percentage of Fuel Surcharge & Hedging Coverage Jan08 Feb08 Mar08 Apr08 May08 Jun08 Jul08 Aug08 Sep08 Oct08 Nov08 Dec08 Jan09 Feb09 Mar09 Apr09 May09 Jun09 Jul09 Aug09 Sep09 Oct09 Nov09 Dec09 Jan10 Feb10 Mar10 Aprl10 May10 Jun10 Jul10 Aug10 Sep10 Oct10 Nov10 Dec10 Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec 57% 65% 6% 56% 51% 51% 61% 65% 69% 7% 7% 63% 8% 74% 13% 131% 6% 10% 91% 78% 8% % 10% 0% 104% 98% 94% 6% 106% 1% 103% 109% 101% 10% 98% 87% 88% 77% 95% 95% 97% 103% 96% 97% 96% 163% 143% 199% Jan08 Feb08 Mar08 Apr08 May08 Jun08 Jul08 Aug08 Sep08 Oct08 Nov08 Dec08 Jan09 Feb09 Mar09 Apr09 May09 Jun09 Jul09 Aug09 Sep09 Oct09 Nov09 Dec09 Jan10 Feb10 Mar10 Apr10 May10 Jun10 Jul10 Aug10 Sep10 Oct10 Nov10 Dec10 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan1 Feb1 Mar1 Apr1 May1 Jun1 Jul1 Aug1 Sep1 Oct1 Nov1 Dec1 0% 0% 0% 0% 3% 17% 38% 41% 44% 44% 49% 35% 7% 0% 3% 3% 3% 7% 13% 13% 17% 0% 7% 30% 44% 44% 44% 47% 47% 47% 51% 51% 51% 50% 50% 56% 69% 69% 69% 69% 69% 69% 80% 80% 80% 73% 73% 73% 75% 75% 75% 78% 78% 78% 68% 68% 68% 80% 80% 80% 7

28 IT Development Infrastructure Redesign and Migrate to Cloud EPayment Gateway Mobile Capability Data Management Enterprise Resource Planning (ERP) Internal Cooperation ECollaboration / Knowledge management Revenue Enhancement CRM / Cross Function Database 8

29 Statistic on Internet Checkin Ticket Sales Via Internet Checkin via Internet % % Year 0 Year Year Year Year Year Jan Feb Mar Apr May 0 Jun Jul Aug Sep Oct Nov DEC 1 Jan Feb Mar Apr May 0 Jun Jul Aug Sep Oct Nov Dec 9

30 Statistic on use of EServices Checkin via Mobile ( # of PAX 4,000 3,81 3,8 3,353 3,500 3,310 3,088 3,000,500,309,31,368,000 1,813 1,500 1,136 1,300 1, Jul 10 Aug 10 Sep 10 Oct 10 Nov 10 Dec 10 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov 30

31 Current price.5 THB / share 19Oct10 19Nov10 19Dec10 19Jan 19Feb 19Mar 19Apr 19May 19Jun 19Jul 19Aug 19Sep 19Oct 19Nov 19Dec 19Jan1 A+ Rating Thai Political Unrest Price Volatility from External Events Peaked at THB Unrest in Middle East Earthquake and Tsunami in Japan Flood Crisis in Thailand USD/BBL (Apr. ) Iceland Volcano Eruption European Economic Crisis 31 19Mar10 19Apr10 19May10 19Jun10 19Jul10 19Aug10 19Sep10 19Jan10 19Feb10

32 Awards and Accolades Achieved Top 5 in the World and Targeting Top 3 in Asia The World s Top Ten Airlines Skytrax Skytrax 0 Best Airline Seat Economy Class Best On Board Catering Economy Class Business Traveler s Award 0 nd for Best Airline nd for Best AsiaPacific Airline 3rd for Best Business Class 3rd for Best Economy Class nd for Best FrequentFlyer Programme 3rd for Best Airline Lounge in AsiaPacific Norwegian Grand Travel Award 0 Best Intercontinental Airline TTG Award 0 Best Business Class Best Southeast Asian carrier Skytrax 010 Best Airline Lounge First Class Best Airport Services Source: Skytrax Go Asia Award Best Asian carrier 3