AOT to Record Lower Income as Air Traffic at Pre-Covid Level Prolongs Further to 2024

AOT to Record Lower Income as Air Traffic at Pre-Covid Level Prolongs Further to 2024.

Airports of Thailand Public Company Limited (AOT) has announced a readjustment of its air traffic forecasts based on the impact assessment of the COVID-19 outbreak situation, which the company expected air traffic to return to pre-Covid level in 2024, further delayed from the previous forecast of 2023.

 

The above-mentioned air traffic forecasts are based on the assumption in the best-case scenario that Thailand will reopen its borders to international travelers after October 2021 due to significant progress made with global vaccinations as targeted.

In the publishing of air traffic forecast (February 2021 edition), AOT expected the total number of 335,459 flights and 31.90 million passengers in the fiscal year 2021; the total number of 547,226 flights and 73.17 million passengers in the fiscal year 2022; the total number of 824,915 flights and 128.85 million passengers in the fiscal year 2023; and the total number of 923,925 flights and 146.40 million passengers in the fiscal year 2024.

 

The adjustment in 2021-2023 showed a decline in air traffic from an earlier forecast in the November 2020 edition since the new British variants and the resurgence of Covid-19 at the fish market did not happen at that time.

On November 25, 2020, AOT expected the total number of 446,986 flights and 47.91 million passengers for the fiscal year 2021 and the total number of 776,763 flights and 110.88 million passengers for the fiscal year 2022. It is also expected that air traffic volumes in the fiscal year 2023 will return to the same level as those in the fiscal year 2019 before the occurrence of COVID-19 outbreak.

 

For the year ended September 30th, 2019, the air traffic volume from six airports under AOT was 896,097 flights, comprised 491,994 international flights and 404,103 domestic flights. The total number of passengers was 141.87 million, comprised 84.05 million international passengers and 57.82 million domestic passengers which mainly came from the increase in international flights and passengers.

In this regard, AOT could see slower income than the previous anticipation since the benchmark of 896,097 flights and 141.87 million passengers in 2019 will not be reached in the fiscal year 2023 according to the latest forecast at 824,915 flights and 128.85 million passengers.

 

Last week, Bloomberg Intelligence (BI) 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 percentages, 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.

 

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