KGI Securities (Thailand) wrote in its analysis, stating it held discussions with Thai Airways International Public Company Limited (SET: THAI) management regarding their 2H26 business outlook, revealing the company’s ongoing resilience despite industry headwinds.
In the wake of rising fuel costs and geopolitical tensions, Thai Airways has maintained strong performance with passenger volumes remaining stable. This is attributed to effective price pass-through to customers and strategic network adjustments in response to the ongoing Middle East conflict.
Thai Airways also expects to benefit from competitor flight reductions in Korea and Hong Kong. Additionally, the airline has seen positive momentum in online sales channels, while sales via traditional agents decline.
The company’s fuel hedging profile was raised in 2Q26 to 60% over a 24-month horizon, from the prior 50% over 12 months. As of 2H26, the hedge ratio stands at 40%, with 30% on Brent crude and 10% directly on jet fuel. Lower advance hedging for 2027 is planned, considering persistently high jet fuel prices.
Strong advance bookings are a key highlight, with 3Q26 bookings up year-on-year, especially in European markets that have returned to 85% cabin factors. The momentum is expected to continue through 4Q26, the peak tourism period.
Notably, the management provided updates on the recruitment of a new CEO, with applications open until September 27, 2026, and final clarity anticipated by year-end.
KGI maintains its net profit forecast for Thai Airways at THB 19.5 billion in 2026 (a 36.8% decline YoY) and THB 23 billion in 2027 (a 17.7% increase YoY). The drop in 2026 is due to falling passenger volumes and higher fuel costs related to the U.S.-Iran conflict, while 2027 should see a rebound in both passenger numbers and more controlled fuel expenses.
Supported by positive expectations and recent inclusion in the FTSE Small Cap Index, the brokerage reiterates its ‘Outperform’ rating on Thai Airways, with a 2027 target price of THB 7.00 per share.
