CGS International Securities (Thailand) (CGSI) has reiterated its positive stance on Thai Airways International Public Company Limited (SET: THAI) following the airline’s 2Q26 analyst meeting, citing robust booking trends, strategic network expansion, and prudent cost management as key supportive factors.
Management signaled that while passenger yields are expected to decrease quarter-on-quarter in the third quarter of 2026—reflecting a normalization of fares and fuel surcharges after their recent spike—booking levels for July and August remain strong, with the cabin factor for July in the mid-80% range. September 2026’s advance bookings are also surpassing figures from the same month last year.
Thai Airways is preparing to increase available seat kilometers (ASK) in the fourth quarter of 2026 by adding new aircraft and expanding seasonal capacity, following deliberate constraints in the previous quarter. The additional aircraft will allow for better fleet deployment and improved alignment of aircraft type with specific routes.
The airline continues to advance its network, with growth focused on feeder routes from China and India and higher-value long-haul services, particularly to Europe. Recent regional expansions include new or enhanced routes to Da Nang and Xiamen, as well as increased frequencies to Paris, Zurich, and Munich.
THAI management stressed its commitment to maintaining a disciplined traffic mix, prioritizing yield and margin over simply increasing load factor, and avoiding aggressive competition with low-cost carriers. On the fuel front, around 40% of THAI’s fuel needs for the second half of 2026 are currently hedged, with hedging flexibility now increased to allow up to 60% coverage for up to 12 months ahead, guarding against volatility.
Some costs, notably staff salaries and aircraft-related variable expenses, are expected to rise in fiscal 2027, though anticipated revenue growth should mitigate margin pressure. CGSI maintains its ‘Add’ rating on THAI with a target price of THB 8.00 per share.
