Thai Airways Q2 profit plunges almost ฿10.6 billion from last year as Middle East unrest drives fuel prices up 104.6%. Flight cuts and weaker passenger traffic pile on pressure even as revenue rises 8.5% and passenger yields jump 20.3%.
Figures released on Wednesday showed Thai Airways has hit severe turbulence directly linked to the Middle East war. Second-quarter profit plunged almost 87% as fuel prices more than doubled, flights were cut and passenger traffic fell. Net profit collapsed to ฿1.537 billion from ฿12.134 billion a year earlier. Meanwhile, the passenger load factor fell to 71.5%, despite higher revenue and sharply increased passenger yields. Yet Thai Airways enters the second half with almost ฿124 billion in liquid financial resources and nine new aircraft.
Thai Airways International saw second-quarter net profit plunge almost 87% as soaring fuel costs hammered the national carrier’s earnings. Net profit fell to ฿1.537 billion for the three months ending June 30. That compared with ฿12.134 billion during the same quarter last year. However, the collapse came despite stronger revenue and sharply higher passenger yields.
The biggest blow came from fuel. Average fuel prices surged 104.6% compared with the second quarter of 2025. Consequently, total expenses jumped 29.7% from a year earlier. Thai Airways linked the fuel surge directly to unrest in the Middle East. The same turmoil also forced flight reductions and weakened passenger travel demand.
Thai Airways Public Company Limited announced the figures on Wednesday, August 12. Total revenue, excluding one-time items, reached ฿48.621 billion during the quarter. This was ฿3.793 billion higher than a year earlier, representing growth of 8.5%. Yet expenses rose more than three times faster in percentage terms.
Higher passenger yields lift revenue but surging fuel costs squeeze Thai Airways’ quarterly earnings
Notably, average passenger revenue per unit increased 20.3% year-on-year. The calculation includes fuel surcharges and insurance premiums but excludes excess baggage charges. Thai Airways had revised its fuel surcharge rates as aviation fuel prices climbed. The changes also reflected competitive conditions facing the carrier.
In response, those higher surcharges helped lift passenger yields despite weaker traffic. Overall revenue still increased even as the airline cut flights. Nevertheless, the extra income could not match the surge in operating costs. Total expenses, excluding one-time items, reached ฿44.930 billion.
The contrast was severe. Quarterly revenue rose 8.5%, while expenses surged 29.7%. Meanwhile, average fuel prices more than doubled from their year-earlier level. Higher passenger yields therefore failed to prevent a sharp contraction in earnings.
Operating profit before finance costs and one-time items stood at ฿3.691 billion. The carrier reported an operating profit margin before finance costs of 17.5%. Separately, finance costs reached ฿3.165 billion during the quarter. Those costs consumed most of the reported operating profit before finance costs.
Quarterly profit plunges almost ฿10.6 billion as Thai Airways reports stronger assets and liquidity
Thai Airways also booked net one-time items as revenue of ฿335 million. Ultimately, the airline finished the quarter with net profit of ฿1.537 billion. The equivalent figure last year was ฿12.134 billion. The year-on-year decline therefore amounted to almost ฿10.6 billion.
Despite that drop, EBITDA remained at ฿8.182 billion during the quarter. The airline also ended June with a larger balance sheet than six months earlier. Total assets reached ฿322.085 billion as of June 30. That was ฿18.026 billion higher than on December 31, 2025.
Accordingly, total assets increased 5.9% during the first half. Liabilities also climbed, reaching ฿240.252 billion by June 30. That represented an increase of ฿12.105 billion from the end of December. In percentage terms, liabilities rose 5.3%.
On another front, shareholders’ equity increased faster than liabilities. Equity reached ฿81.833 billion at the end of June. That was ฿5.921 billion higher than six months earlier, representing growth of 7.8%. The carrier also retained substantial liquid financial resources.
Cash and cash equivalents remained sizeable at the end of the quarter. Together with other current financial assets, they totalled ฿123.757 billion. Thus, Thai Airways entered the second half with almost ฿124 billion held across those categories.
Operational figures showed another side of the pressure. Thai Airways had 84 aircraft in operation as of June 30. Average aircraft utilisation stood at 12.9 hours per aircraft each day. During the quarter, the airline carried 3.66 million passengers.
Middle East flight cuts hit capacity and passenger traffic as Thai Airways’ cabin factor falls sharply
At the same time, available capacity fell from the corresponding period last year. Available Seat Kilometres, or ASK, totalled 16.778 billion seat-kilometres. That represented a year-on-year decline of 4.4%. Thai Airways attributed the reduction to flight cuts caused by Middle East unrest.
Passenger traffic fell considerably faster. Revenue Passenger Kilometres, or RPK, stood at 11.993 billion kilometres. This was 11.3% below the corresponding quarter last year. As a result, traffic contracted more than twice as quickly as available capacity.
The difference hit aircraft occupancy. The average cabin factor dropped to 71.5% during the quarter. A year earlier, it stood at 77%. Hence, the cabin factor declined by 5.5 percentage points despite the reduction in available capacity.
In parallel, passenger revenue per unit moved sharply in the opposite direction. Average passenger yield climbed 20.3%. The airline’s revised fuel surcharges contributed to that increase. Even so, higher revenue per passenger unit could not overcome the much larger cost pressures.
The quarterly numbers showed the scale of the squeeze. Thai Airways generated ฿48.621 billion in revenue before one-time items. Against this, expenses reached ฿44.930 billion. That left operating profit before finance costs and one-time items at ฿3.691 billion.
Finance costs deepen quarterly squeeze while Thai Airways retains stronger first-half profitability
Finance costs then amounted to ฿3.165 billion. Meanwhile, one-time items contributed net revenue of ฿335 million. After those items, quarterly net profit was only ฿1.537 billion. The figure marked a sharp reversal from last year’s ฿12.134 billion result.
The first-half figures were considerably stronger. Thai Airways recorded ฿99.650 billion in revenue during the six months ending June 30. The figure again excludes one-time items. First-half revenue increased by ฿3.198 billion, or 3.3%, from a year earlier.
By comparison, costs rose much faster. First-half expenses, excluding one-time items, reached ฿82.213 billion. That represented an increase of 14.4% from the corresponding period last year. Expense growth therefore exceeded revenue growth by more than eleven percentage points.
Even with those pressures, first-half operating profit before finance costs and one-time items reached ฿17.437 billion. Finance costs, meanwhile, amounted to ฿6.152 billion. The carrier also recorded net one-time revenue of ฿1.424 billion.
Importantly, those one-time gains came mainly from aircraft leasing arrangements. Thai Airways recorded profits from the termination and modification of aircraft lease agreements. Following those items, first-half net profit stood at ฿11.645 billion.
The six-month result also highlights the sharp second-quarter slowdown. Thai Airways earned ฿11.645 billion across the entire first half. Yet only ฿1.537 billion of that net profit was recorded during the second quarter.
Nine new aircraft join Thai Airways fleet as Middle East disruption cuts capacity and passenger demand
Alongside the financial pressures, Thai Airways continued expanding its fleet. The company took delivery of nine aircraft during the first six months. Five were Airbus A321neo narrow-body aircraft. Another four were Boeing 787 wide-body aircraft.
Specifically, three Boeing 787-8 aircraft joined the fleet during the first half. Thai Airways also received one Boeing 787-9. The carrier said these aircraft would strengthen its fleet and support future route expansion. By June 30, 84 aircraft were in operation.
The deliveries added narrow-body and wide-body aircraft while regional disruption was forcing other operational adjustments. In particular, Middle East unrest prompted reductions in flights. Those cuts contributed to lower available seat capacity and weaker passenger traffic.
As part of this disruption, ASK declined 4.4% from a year earlier. RPK dropped a much steeper 11.3%. The cabin factor consequently fell from 77% to 71.5%. Passenger demand therefore weakened faster than the airline reduced capacity.
Against that backdrop, the 20.3% increase in passenger yield became particularly important. Thai Airways adjusted fuel surcharges to reflect aviation fuel price trends. Competitive conditions were also considered when setting the revised rates. This helped support revenue as passenger traffic weakened.
Fuel prices more than double as Thai Airways faces rising finance costs despite balance-sheet growth
Still, the biggest financial movement remained the surge in fuel prices. Average fuel prices increased by 104.6% year-on-year. That fed directly into the 29.7% jump in quarterly expenses. By contrast, quarterly revenue increased by only 8.5%.
Furthermore, the airline faced higher operating expenses. Finance costs reached ฿3.165 billion in the second quarter. Across the first six months, they totalled ฿6.152 billion. These charges remained substantial against the carrier’s operating earnings.
Balance-sheet growth continued despite those pressures. Assets increased by ฿18.026 billion during the first six months. Liabilities rose by ฿12.105 billion over the same period. Shareholders’ equity increased by ฿5.921 billion.
In percentage terms, equity grew 7.8%, while liabilities increased 5.3%. Total assets expanded by 5.9%. Additionally, cash and other current financial assets remained at ฿123.757 billion.
The carrier’s operational footprint also remained substantial. Its 84 aircraft averaged 12.9 utilisation hours each day. Thai Airways carried 3.66 million passengers during the quarter. However, both capacity and passenger traffic were below their year-earlier levels.
More broadly, Middle East unrest affected several major second-quarter indicators. Fuel prices rose sharply, while flights were reduced. Passenger demand also weakened. At the same time, the carrier increased fuel surcharges and generated higher average passenger revenue per unit.
Middle East unrest drives up fuel costs and cuts traffic despite higher Thai Airways passenger yields
The result was higher revenue but much higher costs. Revenue before one-time items rose to ฿48.621 billion. Expenses climbed to ฿44.930 billion. Operating profit before finance costs and one-time items was consequently limited to ฿3.691 billion.
Afterwards, finance costs of ฿3.165 billion further narrowed the result. Net one-time revenue of ฿335 million provided some support. Net profit nevertheless finished at ฿1.537 billion, almost ฿10.6 billion below last year’s second-quarter figure.
For the first half, the picture remained stronger but showed similar cost pressure. Revenue rose 3.3% to ฿99.650 billion. Expenses climbed 14.4% to ฿82.213 billion. Operating profit before finance costs and one-time items reached ฿17.437 billion.
One-time revenue also strengthened the six-month result. Gains from aircraft lease terminations and modifications helped produce net one-time revenue of ฿1.424 billion. After finance costs, Thai Airways reported first-half net profit of ฿11.645 billion.
Thai Airways targets cost control and liquidity after quarterly profit plunges amid soaring fuel prices
Looking into the second half, the airline said it continues to closely monitor Middle East unrest. Operational plans are being adjusted as conditions change. Thai Airways said it would focus on disciplined cost management and maintaining liquidity.
In addition, the carrier said those measures would support competitiveness and growth during the second half. Fleet expansion is continuing alongside that approach. The nine aircraft delivered during the first half are intended to support future route expansion.
For now, the latest accounts show a stark change from the second quarter of 2025. Net profit has fallen from ฿12.134 billion to ฿1.537 billion. Average fuel prices have risen 104.6%, while total quarterly expenses have climbed 29.7%.
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At the operational level, passenger traffic fell 11.3%, while capacity declined 4.4%. The average cabin factor dropped 5.5 percentage points to 71.5%. Conversely, passenger yield rose 20.3% after fuel surcharge revisions.
Thai Airways therefore enters the second half with sharply reduced quarterly earnings but substantial liquidity. It has 84 aircraft in operation and nine recent fleet additions. Meanwhile, Middle East unrest continues to influence fuel costs, flight planning and passenger demand.
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Further reading:
Thai Airways bolsters the kingdom’s connection to Europe with daily flight from Bangkok to Amsterdam
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