INTERVIEW-Thai Airways sees net profit in 2010, unsure of 2009

BANGKOK, Nov 6 - Thai Airways International <THAI.BK> expects to make a net profit in 2010 thanks to economic recovery and restructured management, but fare price cuts mean it is not certain to make a profit this year, its new president said.

"All in all, this year's performance should still be affected by the price war. We don't know whether we might return to net profit or not. But certainly we should show a net profit next year," Piyasvasti Amranand told Reuters in an interview.

The flag carrier, which will report third-quarter earnings by Nov. 16, had seen clear signs of improvement in the economy from the third quarter of this year, with a recovery in its cargo business and growing passenger traffic.

But a decline in its passenger yields -- a key measure of revenue per unit of passenger traffic -- will drag on its quarterly performance, Piyasvasti said.

"Passenger yields dropped significantly after our price promotion campaigns, although the fourth quarter should be better due to the high season," he said.

"But I'm not sure ... It depends on how much yields improve and how high oil prices are."

Thai Airways reported a net profit of 2.47 billion baht ($74 million) in the first six months. Twelve analysts surveyed by Thomson Reuters I/B/E/S forecast a net profit of 2.02 billion baht for this year and 3.48 billion baht for 2010.

The airline planned to boost its fuel-hedging contracts to 30-70 percent of fuel needs, up from 20 percent now and 3 percent earlier this year, Piyasvasti said, saying the airline needed a more consistent fuel hedging policy to manage risk.

The flag carrier, in the process of overhauling operations and restructuring management after a huge net loss of 21.4 billion baht in 2008, announced a plan last month to issue shares next year to raise funds for repaying short-term debt. ($1=33.39 Baht)