Airports of Thailand third-quarter profit up 19 percent on passenger charges, concessions

 

FILE PHOTO: Thailand's Suvarnabhumi International Airport (BKK) is seen during dusk in Bangkok, February 20, 2018. REUTERS/Athit Perawongmetha/File Photo

 

BANGKOK (Reuters) - Airports of Thailand Pcl (AOT) <AOT.BK> on Tuesday reported a 19.2 percent jump in third-quarter profit, aided by passenger service charges and revenue concessions on tourism while a rapid expansion among low-cost carriers also helped.

 

AOT reported a net profit of 6.4 billion baht ($192.42 million) in its the April-June period versus 5.4 billion baht a year earlier, beating Thomson Reuters I/B/E/S estimate of 5.9 billion baht.

 

The state-owned AOT, which operates six airports in Thailand, said tourists arrivals, especially from China, continued to grow due to government support and lower airfare.

 

Expansion of low cost airlines also led to price competition, AOT said in a statement.

 

Aeronautical revenue, which include passenger service and aircraft charges, came in at 8.3 billion baht, up 10.2 percent from the same period a year earlier on the back of a 16 percent increase in budget airline passengers.

 

Non-aeronautical revenue from concessions and property rent grew nearly 10 percent to 6.5 billion baht.

 

Meanwhile, investors are closely watching an upcoming auction for duty free concession later this year. A Thai retail industry group has recommended the auction be in multiple concessions.

 

Earlier in the day, a Thai court postponed its decision to September on taking up a graft case against Airports of Thailand and duty free retailer, King Power executives.

 

AIRPORTS EXPANSION

 

Despite strong earnings performance, AOT is racing to increase passenger capacity and improve service quality. So far this year, it has announced $6 billion worth of projects across Thailand, including passenger terminals and new airports.

 

Thailand expects tourist arrivals to reach 37.5 million this year, up 6 percent from 2017.

 

Its main airport, Suvarnabhumi, has a capacity of 45 million passengers but receives 60 million a year, which has affected its ability to service arrivals efficiently. A second passenger terminal to be completed in 2020 will bring capacity up to 60 million.

 

Airport reviewer, Skytrax, ranks Suvarnabhmi Airport at 36th out of 100.

 

Expansion will enhance convenience and enable quicker services for passengers, AOT added.

 

-- © Copyright Reuters 2018-8-14

Surely a semi-government agency should not be aiming to be highly profitable, and especially to the point of winning global awards for most profit.

 

It should revert to its actual purpose - well organized efficient, clean, safe airports with fees which pay the costs of operation plus a calculated amount to fund / partly fund future expansion, upgrades, renovations etc.