Krungsri Securities (KSS) has expressed a slightly negative view on Thailand’s aviation sector after a recent decline in international tourist arrivals during the week of September 8-14. The latest figures show arrivals fell by 11% year-on-year, a steeper drop than the previous week’s 5% decline, as almost all regions experienced continued contraction.
Despite a seasonal week-on-week recovery of 11%, which was driven by a public holiday in Malaysia, KSS maintains that the 2025 target of 34 million international tourists, as forecasted by Krungsri Research, remains highly challenging amid ongoing global economic and geopolitical uncertainties.
The analyst continues to hold a neutral stance on Thai airline stocks, citing that the industry has moved beyond its peak recovery period following the post-pandemic surge in travel demand. Looking ahead to 2025-2026, KSS anticipates slower growth across the sector, with mounting risks from intensifying competition.
Bangkok Airways (SET: BA) continues to be Krungsri’s top pick in the sector, supported by several factors: strong growth on Koh Samui routes driven by European travelers, expected standout earnings growth quarter-on-quarter in 3Q25, and potential relief from investment risks if there is clarity—or even cancellation—on the U-Tapao project in 3Q25.
BA’s valuation is seen as attractive, trading at 9-10 times 2025 forecast earnings, lower than its peer Thai Airways (SET: THAI)’s 15-16 times. The brokerage firm also expected BA to offer a dividend yield of 5% per annum.
