Airports of Thailand (SET: AOT) is gaining altitude in the eyes of major analysts as a wave of concession renegotiations and a higher-than-expected passenger service charge (PSC) boost begin to reshape the company’s growth outlook.
Finansia Syrus Securities has issued an upgraded outlook for AOT, raising its recommendation to BUY from HOLD with a new DCF-based target price of THB53.75. The upgrade follows AOT’s announcement of revised duty-free concession terms with King Power Duty Free (KPD) and a higher-than-expected increase in Passenger Service Charge (PSC) for international passengers.
Under the new agreements on duty free, Suvarnabhumi Airport (BKK) will see a Minimum Annual Guarantee (MAG) of THB232.90 per passenger, escalating 5% annually from 2030, alongside a 35% revenue share on incremental spending, with the contract extended until FY35. For Don Mueang Airport (DMK) and three regional airports, MAGs will apply per square meter or passenger, also incorporating annual escalations and higher revenue-sharing components.
Analysts view the PSC hike for international passengers to THB1,120 from THB730 starting early 2026 as a key positive surprise, surpassing market expectations. This development is projected to drive core profit growth, aided by increasing air traffic. Finansia raises its FY26-28 earnings projections by 23%, 57%, and 60% respectively, anticipating a 22% core profit rise in FY26 and 34% in FY27 with the full-year benefit from the PSC hike.
The report highlights the improved growth outlook due to the blend of higher PSC, long-haul passenger growth, and gradual Chinese tourist recovery. Finansia emphasizes that the PSC hike will be a critical catalyst for margin expansion, improved ROE, and a return to pre-pandemic earnings by FY27.
Morgan Stanley’s latest research on AOT highlights the positive impact of the revised duty-free contract with King Power. If King Power adheres to the new terms, Morgan Stanley estimates an annual earnings per share (EPS) boost of 4-5% for AOT from 2026 onward, dispelling market fears of the loss of minimum payments or contract cancellation.
The new contract maintains AOT’s minimum guarantee revenue per passenger for seven more years with a 5% annual escalation. Additionally, revenue sharing above a minimum threshold increases from 20% to 35%. However, due to lower average tourist spending per passenger, analysts see this change as having a limited earnings impact in the near term.
Morgan Stanley notes the dominant role of the passenger service charge (PSC) increase in supporting a re-rating of AOT shares. The removal of the duty-free revenue overhang and confirmed higher PSC are viewed as key catalysts for AOT’s medium-term outlook.
Maybank Securities maintains its BUY rating on AOT, raising the target price to THB56.00 from THB49.00 after the upward revision of the duty-free contract and international Passenger Service Charge (PSC). The board-approved amendments establish a new Minimum Annual Guarantee (MAG) of THB233 per outbound passenger at BKK, increasing 5% yearly until 2035, marking a more positive outlook for concession revenue growth.
The Civil Aviation Authority of Thailand (CAAT) approved a PSC increase to THB1,120—well above Maybank’s expectation. While there is no PSC increase for domestic passengers, the rise in international PSC better reflects actual airport costs and future capex plans.
Maybank anticipates an additional earnings boost of THB1.9 billion from new PSC collection for transit-transfer passengers and higher ground/cargo concession revenues. Consequently, this generates upside for future earnings estimates from FY27 onward.
The new concession structure, with its annual MAG hike, should accelerate non-aero revenue faster than passenger growth. However, risks remain, including the possibility that King Power’s financial challenges could impact payments and the slow recovery of short-haul travelers.
Bualuang Securities sees a significant improvement in AOT’s mid-to-long-term earnings after revising profit forecasts upwards by 12% and 14% for 2026 and 2027, respectively, and 21% in the long term. The boost is attributed to renegotiated concession terms with King Power Duty Free—which now include a lower initial Minimum Guarantee (MG) per passenger at Suvarnabhumi (down to THB232.90 but with annual 5% escalations and higher revenue sharing up to 35%)—and an international PSC hike, which is higher than expected.
The improved duty-free contract is expected to generate about 5% upside to Bualuang’s base case, with the PSC hike contributing an additional 10% upside in 2027, totaling 21%. The PSC increase allows AOT to immediately benefit from passenger growth, even during heavy investment cycles, reinforcing margin stability.
Furthermore, soaring Chinese tourist demand, as evidenced by flight bookings for Q1 2026 (+15% YoY), is another upside factor. Every 5% increase in Chinese arrivals potentially contributes THB600 million in revenue and THB500 million in profit, equating to a 2.2% profit rise.
With these positives, Bualuang raises its target price from THB47 to THB56 and reiterates its BUY recommendation.
