Ms. Paweena Jariyathitipong, Deputy Managing Director of Engineering and Construction of Airports of Thailand Public Company Limited (SET: AOT), informed “Kaohoon” that the company is determined to transform Thailand into a regional aviation hub without difficulty during the government transition.
She noted that the operation remains unaffected by the government transition in Thailand. Details of the transformation plan to the regional hub has been prepared for the new administration to see the urgent need for this plan.
The first mission is to increase passenger service charge (PSC) to an appropriate amount to generate revenue that can be utilized to develop the airport and improve its services. This will allow the company to compete with foreign airports, such as Singapore Changi Airport.
AOT has received a greenlight from the Civil Aviation Authority of Thailand (CAAT) to raise PSC by THB 5 per passenger both domestically and internationally. This would generate an additional revenue of THB 200-300 million per year. The process is being halted at the final approval due to the resigned board of directors in the Civil Aviation Board (CAB), chaired by Thailand’s Minister of Transport (MOT). The finalization requires a fully set government and a board appointment for the approval.
Meanwhile, the second mission is to amend the concession contract with King Power for its duty-free shops in six airports under AOT. The company estimated that it will be finalized within this October.
The last mission is to select the third operator for airplane ramps and ground support equipment and cargo terminal services at Suvarnabhumi Airport. The projects’ total value is THB 67.3 billion, with the airplane ramps and ground service equipment project worth THB 29.39 billion, while the cargo terminal service project worth THB 37.91 billion.
AOT plans to announce the official selection result early next week with an agreement signing expected by next year after the approval of the cabinet..
A source related to the matter stated that AOT Ground Aviation Services Company Limited (AOTGA) has emerged as the winner in both projects. The company is jointly owned by AOT (49%) and SAL Group (Thailand) Company Limited (SAL), which holds a 51% stake. SAL itself is held by SKY ICT PCL (SET: SKY) (46.8%), Triple i Logistics PCL (SET: III) (25.46%), and MyBox Co. Ltd. (13.60%), making SKY’s effective interest in AOTGA approximately 24%.
Bualuang Securities forecasted that the strategy to transform Thailand into a regional aviation hub would increase revenue by THB 33 billion per year and estimated that shares from five companies would benefit from it.
First is AOT as the company directly benefits from PSC, transit fee, and airport charges. Second is Thai Airways International PCL (SET: THAI), gaining from its fleet and flight routes expansion. Third is SKY from its airport service technologies, such as CUPPS (Common Use Passenger Processing Systems), APPS (Advance Passenger Processing System), and digital solution.
Fourth is TEAM Consulting Engineering and Management PCL (SET: TEAMG) as the company benefits from being a consultant and designer for the expansion project of certain airports, such as Suvarnabhumi Airport’s South Terminal and U-Tapao International Airport. And finally, III, due to being a logistics and transport service provider, benefited from the expansion of the airports’ cargo volume.
The securities company also stated that the regional aviation hub will transform not only infrastructure, but also the infrastructure of the Thai economy, generating sustainable revenue from passenger, cargo, and supporting business. Beside the additional revenue of THB 33 billion per year, there is also a multiplier effect from transit passengers making a short stop to travel in Thailand, the expansion of retail businesses, restaurants, and the job creation in the aviation industry’s supply chain.
