However, high oil prices and the weak Thai baht have pushed up costs and weighed down on the recovery. Airlines have suffered third-quarter losses despite increased revenue.
Thai Airways, posted a net loss of 4.8 billion baht (US$135 million) in the third quarter, but that was a fraction of the 40 billion baht lost in the same period of last year.
Thai Airways said the impairment loss on assets was larger because of oil prices and the adverse exchange rate.
Thai Air Asia also had a net loss of 4 billion baht in the quarter, double the 2 billion baht loss in the same period last year.
Bangkok Airways posted the smallest loss with only 392 million baht compared to 6.9 billion baht last year.
“Their performances are better with more tourists coming in, but it is not good enough to generate a profit,” an analyst at Asia Plus Securities told NIkkei Asia.
According to the Tourism Authority of Thailand (TAT), Thailand has welcomed 7.6 million foreign tourists so far this year. That was well above 427,000 last year during the Covid-19 pandemic. TAT expects up to 10 million tourists overall this year and is forecasting 18 million in 2023.
Thai Airways saw a 582% rise in revenue to 32.9 billion baht in the third quarter, up from 4.8 billion baht in the same period last year. Air Asia saw a 969% increase between the two periods, and Bangkok Airways 486%.
Oil prices have meanwhile jumped 80% from an average of US$81 per barrel last year to US$146 per barrel in the third quarter, seriously eroding profitability.
“We expect the Thai airline business to continue its recovery in the fourth quarter, which is the high season,” said an analyst at Kasikorn Research Center. “But the business will not look as good as before the Covid pandemic until next year or the year after when tourism is expected to recover completely.”
That matches an Association of Asia Pacific Airlines (AAPA) forecast, which predicts the global airline business will return to pre-Covid levels in 2023 or 2024 when tourism and travel regulations are back to normal.