Thai Airways reported a steep drop in profits for the March quarter, although the airline is also moving closer to gaining approval for a major aircraft order.

Thai is seeking government permission to place orders for 38 aircraft, most of which will replace older models. The carrier said it received board approval for the order in January, and gained clearance from two government agencies in March and April. Thailand’s cabinet is now in the process of deciding on the fleet plan, the airline said.

Net profit for the first quarter fell to THB456 million ($14.4 million), down from THB2.7 billion in the same period last year. Thai recorded an operating loss of THB828 million for this year’s first quarter, but was boosted to a net profit by a larger gain from foreign exchange movements and other items.

Revenue was down by 6.9% to THB49.8 billion in the quarter, partly because of lower passenger and freight volume, and a decrease in yield related to higher competition.

The carrier reports that tourism growth into Thailand is slowing after rapid increases last year. Overall costs rose by 2% to THB50.6 billion.  

Thai’s capacity was down 2.8% in the first quarter, with traffic falling 3.2% and load factor declining 0.3 percentage points to 80.3%. Yield was down 4.3%.

Thai and its subsidiaries had 103 aircraft at the end of the first quarter, the same number as at the end of December 2018, but one less than in last year’s first quarter.

The carrier continues to implement its multi-year transformation program, which is expected to bring financial stability by 2022.

Adrian Schofield,