Bloomberg Intelligence (BI) has published its view on Airports of Thailand Public Company Limited (AOT), stating that the company may continue to suffer operating losses as international passenger traffic remains at the lower level.
On February 10, 2021, AOT announced a net loss for the three-month period ended December 31, 2020 at 3,441.98 million baht, which decreased by 10,776.70 million baht compared to the corresponding period of the prior year in which net profit of 7,334.72 million baht was generated. Fain on foreign exchange increased by 347.32 million baht due to foreign currency translation of long-term loans
BI stated that AOT may continue to suffer operating losses of at least 3 billion baht per quarter as international passenger traffic remains more than 90% below pre-pandemic levels.
The lifting of foreign entry restrictions in December only minimally boosted tourism whereas concerns over the infection and quarantine requirements continued to keep travellers away from the country.
In this regard, BI expected that a recovery in traffic for AOT may be elusive until mass vaccination is achieved and proven effective in reducing Covid-19 infections in Thailand, which BI expected to be no sooner than 4Q21.
In the first quarter of FY 2021, the air traffic volume of the six airports under AOT’s responsibility totalled 104,336 flights, accounting for a 53.50% decrease compared to the corresponding period of the prior year, comprising 14,903 international flights and 89,433 domestic flights.
The total number of passengers was 10.73 million, accounting for a 70.79% decrease compared to the corresponding period of the prior year, comprising 0.20 million international passengers and 10.53 million domestic passengers.
According to BI, revenue from domestic traffic may have helped reduce some losses for AOT, but that would be only a few percentage, given much lower airport charges and retail spending. Still, the recovery remains choppy amid the resurgence of coronavirus since late December last year. Meanwhile, AOT’s high fixed cost ratio will limit room for further operating expenses reduction.