Company Coverage
Thai Airways (THAI TB): Gradual qoq Improvement In Earnings Outlook
BUY (Maintained)
Current price:
Target price:
Upside:
Bt5.80
Bt6.80
+17.2%
Analyst
Analyst
Nonpawit Vathanadachakul
Highlights
3Q26 bookings have shown yoy growth, which implies improving travel demand.
THAI should be able to deliver stronger unit margins qoq from its lean CASK and the improving cabin factor that will drive its RASK.
We see that THAI’s valuation remains undemanding while the earnings outlook is gradually recovering on stronger booking demand and improving margins qoq. Maintain BUY with a target price of Bt6.80.
Analysis
- Positive tone from the analyst meeting. We attended Thai Airways’ (THAI) analyst meeting to review its 2Q26 results and the tone was positive.
- Strong bookings in 3Q26. THAI is starting to see stronger flight demand in 3Q26 and will not be reducing flights like in 2Q26. The cabin factor in Europe routes is now very strong at over 80% based on Jul-Aug 26 bookings, which is a strong improvement from 2Q26’s cabin factor at 70% for Europe routes. The bookings in 3Q26 currently are already up yoy, which is an improvement from our previous update. Even the seasonally weakest month of Sep 26 has shown bookings growth yoy which reflects strong travel demand. This has shown THAI’s ability to improve its weaker areas in 2Q26, such as the Europe route. The passenger yield in 3Q26 should decline slightly qoq from the decrease in ticket price but should remain at a higher level than during the pre-war period.
- Lower unit cost driving qoq improvement in 3Q26. THAI’s main strategy is to prioritise and maximise passenger yield. Although we foresee passenger yield dropping qoq due to airfares normalising, we still expect the yield to remain at a high level. The qoq improvement in cabin factor will also be a vital Revenue per Available Seat Kilometer (RASK) driver in 3Q26. Meanwhile, the Cost per Available Seat Kilometer (CASK) should drop qoq as the fuel price has settled down from 2Q26. Moreover, management guided that we should see no significant qoq increase in maintenance and employee expenses. Hence, we expect to see a unit margin improvement in 3Q26. THAI currently has one of the leanest CASK as a result of it having recently exited the rehabilitation plan. This is a positive sign that THAI’s earnings outlook is improving.
Highlights
3Q26 bookings have shown yoy growth, which implies improving travel demand.
THAI should be able to deliver stronger unit margins qoq from its lean CASK and the improving cabin factor that will drive its RASK.
We see that THAI’s valuation remains undemanding while the earnings outlook is gradually recovering on stronger booking demand and improving margins qoq. Maintain BUY with a target price of Bt6.80.
Analysis
- Positive tone from the analyst meeting. We attended Thai Airways’ (THAI) analyst meeting to review its 2Q26 results and the tone was positive.
- Strong bookings in 3Q26. THAI is starting to see stronger flight demand in 3Q26 and will not be reducing flights like in 2Q26. The cabin factor in Europe routes is now very strong at over 80% based on Jul-Aug 26 bookings, which is a strong improvement from 2Q26’s cabin factor at 70% for Europe routes. The bookings in 3Q26 currently are already up yoy, which is an improvement from our previous update. Even the seasonally weakest month of Sep 26 has shown bookings growth yoy which reflects strong travel demand. This has shown THAI’s ability to improve its weaker areas in 2Q26, such as the Europe route. The passenger yield in 3Q26 should decline slightly qoq from the decrease in ticket price but should remain at a higher level than during the pre-war period.
- Lower unit cost driving qoq improvement in 3Q26. THAI’s main strategy is to prioritise and maximise passenger yield. Although we foresee passenger yield dropping qoq due to airfares normalising, we still expect the yield to remain at a high level. The qoq improvement in cabin factor will also be a vital Revenue per Available Seat Kilometer (RASK) driver in 3Q26. Meanwhile, the Cost per Available Seat Kilometer (CASK) should drop qoq as the fuel price has settled down from 2Q26. Moreover, management guided that we should see no significant qoq increase in maintenance and employee expenses. Hence, we expect to see a unit margin improvement in 3Q26. THAI currently has one of the leanest CASK as a result of it having recently exited the rehabilitation plan. This is a positive sign that THAI’s earnings outlook is improving.
BUY (Maintained)
Current price:
Target price:
Upside:
Bt5.80
Bt6.80
+17.2%
Analyst
Analyst
Nonpawit Vathanadachakul
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