THAI and AAV to Benefit from the Government’s Stimulus Plan with Lower Fuel Cost

The stimulus plan from the government is expected to relieve fuel cost by 800 million baht for AAV and 300 million baht for THAI.


Yesterday, the Thai Cabinet approved the resolution for a stimulus plan to boost the Thai economy amid the virus outbreak that tormenting the global market.

 

Among the stimulus plan, a cut in jet fuel tax is included. The plan is to temporarily lower the jet fuel tax from ฿4.726/liter to ฿0.20/liter, effectively from the enforcement date to September 30, 2020. The cut is a huge benefit for airline operators.

The Ministry of Commerce speculated that the cut would reflect a loss of around 2 billion baht to the country while KT Zmico Securities picked Asia Aviation Public Company Limited (AAV) and Thai Airways International Public Company Limited (THAI) to be the most outstanding beneficial operators for this plan.

The plan is expected to relieve fuel cost by 800 million baht for AAV and 300 million baht for THAI. This will partially offset a loss from lower tourist arrivals amid coronavirus outbreak which diminishes a huge number of Chinese tourists from travelling to Thailand, especially during the Lunar New Year event.

 

AAV closed the morning session on February 5, 2020, at ฿2.00/share, plunged ฿0.02/share or 0.99% while THAT gained ฿0.15/share or 2.61% to close the morning session at ฿5.90/share.

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