Krungsri Securities (KSS) has a positive outlook on the recent statistics for tourism and aviation in Thailand, which reflect a robust recovery, particularly spurred by a continued resurgence in the number of Chinese tourists.
Total tourist arrivals have increased by 15% year-on-year, while passenger and flight volumes across the country have expanded by 6% to 8% year-on-year. Despite pressures from the ongoing conflict in the Middle East and elevated oil prices, the impact on Thailand has remained limited, supporting a continued positive long-term outlook for the aviation sector.
Airports of Thailand Public Company Limited (SET: AOT) remains Krungsri’s top pick, as the company is considered to carry relatively low risk and also stands to benefit from an increase in passenger service charges (PSC) in June 2026, which is expected to significantly enhance its earnings performance.
According to data for week 12 of 2026 (covering 16–22 March), total tourist arrivals reached 680,000, representing a 15% year-on-year increase and a 7% rise from the previous week. This strong growth is primarily attributed to a sustained recovery in the number of Chinese tourists since the Chinese New Year in February 2026 and growth in Muslim tourist arrivals following the end of Ramadan, which overlapped with last year’s period.
Chinese arrivals stood at 100,000 (+41% YoY, -1% WoW), maintaining double-digit growth as confidence in travel safety improved and as a result of ongoing tensions between China and Japan, positively affecting flows to Thailand. However, the cumulative total for tourist arrivals in 2026 has reached 8.54 million, down 3% year-on-year, primarily due to declines in tourists from ASEAN countries, Europe, and the Middle East, which have been affected by the Middle East conflict.
According to data from the Civil Aviation Authority of Thailand (CAAT) for 1–22 March, total national air passenger traffic increased by 8% year-on-year. Growth has been consistent throughout the year, with a 4% year-on-year increase in January and 9% in February. Both international and domestic passenger segments achieved an equal 8% year-on-year increase. Flight volumes for the same period grew by 6% year-on-year, with domestic flights up by 10% and international flights up slightly by 2%.
For AOT-managed airports, which represent 80–90% of the country’s total air passenger volume, growth in the number of passengers reached 8% year-on-year between 1–21 March. This increase spans nearly all passenger groups and airports under the company’s management, with the exception of a 3% year-on-year decline in international passengers at Phuket International Airport (a reversal from 10% year-on-year growth in February) and a continued decline at Hat Yai International Airport since the start of 2026.
The number of flights at AOT airports grew by 5% year-on-year, with almost all airports seeing increased activity, except at Phuket, where flight numbers were flat compared to last year, owing to a drop in international flights.
Regarding outbound flights from China for week 12 of 2026 (17–23 March), flights between China and Japan dropped by 47% year-on-year, continuing a steep decline since late 2025 following diplomatic tensions between the two countries. Conversely, China–South Korea and China–Thailand outbound flights both recorded 16% year-on-year growth, with the latter rebounding notably from the beginning of 2026 due to improved travel safety perceptions and the aforementioned China–Japan tensions.
As of 23 March 2026, jet kerosene prices stood at USD 229.96 per barrel, up 167% year-on-year. The March 2026 monthly average is USD 184.6 per barrel, up 116% year-on-year, while the first quarter average is USD 113.5 per barrel, up 26% year-on-year. Brent crude oil closed at USD 104.57 per barrel on 24 March, representing a 43% year-on-year increase, with the March average at USD 96.3 (up 35% year-on-year) and the Q1 average at USD 75.2 per barrel (up 1% year-on-year).
On the currency front, as of 23 March 2026, the Thai baht stood at 32.75 per US dollar, depreciating by 1% from the previous day, by 5% from the end of February 2026, and by 4% since the end of 2025.
In summary, Krungsri maintains a constructive view of the aviation sector based on (1) the return to growth in tourist arrivals (+15% year-on-year), and (2) sustained year-on-year growth in passenger volumes in March 2026, even amidst the Middle East conflict, which has affected key aviation hubs that serve as connections between Europe and Thailand.
Middle Eastern tourists account for just 1–2% of total arrivals, and flights from the region make up only 3% of total traffic. Nonetheless, the situation in the Middle East warrants close monitoring, as further escalation and potential damage to energy infrastructure could drive oil prices higher and impact travel costs beyond current expectations.
Long-term, Krungsri remains bullish on the aviation sector for the following reasons:
- Chinese tourists are showing strong signs of recovery, supporting overall growth in tourist arrivals.
- Continued aviation growth, even under the constraints of the Middle East conflict, underlines the resilience of Thailand’s aviation industry.
- The broader Asian aviation sector may benefit from airlines shifting their operational bases to reduce geopolitical risk.
Among airline stocks, AOT (Buy, TP THB 65.00) remains the top pick for its lower risk profile (with limited exposure to oil prices and Middle East conflict), upside from the June 2026 PSC adjustment, and potential benefits from relocated aviation hubs.Other ratings include AAV (Neutral, TP THB 1.41), BA (Buy, TP THB 25.00), and SAV (Buy, TP THB 18.10).
