Increased aircraft movements drive AoT profit growth

Airports of Thailand Plc (AoT), a SET-listed company, recently announced a substantial 32.5 percent jump in net profit in its fiscal second quarter. The reason, primarily, for this surge in net profit was on the back of strong air traffic growth across the six airports under its control.

Although AoT is state controlled, it nonetheless operates to make a profit for shareholders, and it was no surprise to see shares bounce on the back of the announcement.

Total revenue rose by a solid 14.4 percent to 12.1 billion baht, with revenue from sales and service growing by 14.9 percent to hit 11.6 billion baht. All up, these figures equated to a net profit of 4.89 billion baht in period between January and March this year and represented a significant rise on the 3.69 billion baht profit accrued in the same period in 2014.

Of course, a salient fact to remember from that January to March quarter in 2014 was this was at the height of the political crisis which gripped Bangkok and much of the country prior to the military coup of May.

Notably, the improved results are primarily due to a 13 percent growth in aircraft movements through the six airports under AoT control, including Suvarnabhumi International Airport.

In the six months prior to 31 March this year, aircraft take-offs and landings through the six AoT-controlled airports totaled 351,760, an 11.1 percent increase. Of that number, 181,696 were international flights and 170,064 were domestic.

As far as passenger numbers are concerned, in that same six-month period, the number stood at 54.3 million people, a 17.9 percent growth on the same period the previous year. Of these, 31.4 million were international passengers and 22.9 million were domestic travellers.

The number of passengers passing through AoT airports represents a 22.9 percent increase year-on-year.

Recently, the International Civil Aviation Organisation announced it had significant safety concerns about Thailand’s Civil Aviation Department and this has led Japan, South Korea and China to place restrictions on new flights by Thai-run airlines into their airports. So far, this has not resulted in any effect on air traffic volume through AoT-controlled airports in Thailand.

For AoT, total expenses have increased by 4.53 percent to 6.13 billion baht, largely on the back of a rise in employee benefits. Yet, despite this rise in operating costs, the returns and profits registered over the last three to six months are one positive in what has been a largely negative period for the overall Thai economy in so many other areas.

AoT believes their positive results will continue on the back of more political stability in Thailand, the coming investment in large-scale projects and lower oil prices, which should all help drive demand for air travel.