Thai International Airways (THAI) recorded the steepest net loss for the first nine months.-Reuters

BANGKOK:Reeling from a slew of negative factors, the financial performance of airlines listed in the Stock Exchange of Thailand (SET) took a nosedive across the board last year.

According to the Bangkok Post, this was despite higher foreign tourist arrivals and rosy tourism revenue.

Thailand saw a total of 39 million international tourists last year, compared with 38 million in 2018, cementing the nation’s position as a favourite destination among global travellers.

Revenue from tourism also soared by 3.7 per cent for the first 11 months of last year compared with 2018.

However, this did not register as positive earnings for SET-listed airlines, with all four airlines reporting net profits in the red for the third quarter.

Thai International Airways (THAI) recorded the steepest net loss for the first nine months.

Despite THAI shares falling by 43.4 per cent last year, THAI president Sumeth Damrongchaitham said such losses were normal for airlines amid fierce competition and price wars to win customers.

Asia Aviation, a holding company that owned the majority of Thai AirAsia, also faced difficulties. Due to price wars in the international market and higher expenses related to airport operations and staff costs, the airline’s share price tumbled the most last year, with a 46.7 per cent nosedive.

The Postsaid aviation was among the most affected sectors in the stock market, with a sharp decline in share prices based on a streak of losses attributed to heightening downside risks.

‘Higher competition from low-cost airlines and lower tourism growth (compared with double-digit growth tallies in the past) were key factors shaving off profits of the aviation industry last year.

Higher oil prices and the prolonged global economic slowdown have kept a lid on the industry’s earnings outlook for this year,’ Sukit Udomsirikul, managing director for research at SCB Securities (SCBS) said.

SCBS vice-president Ekpawin Suntarapichard added that higher oil prices will put more pressure on companies operating in the aviation industry.

Last year, many low-cost domestic carriers reported losses, with the higher jet fuel tax seen as one of the factors derailing their earnings, reported the National News Bureau of Thailand.

The losses led to some airlines cancelling certain domestic routes. The Excise Department held talks with airline representatives and fuel suppliers on the feasibility of reducing jet fuel taxes as a remedy.