On Monday at 2:37 PM (Bangkok time), the share price of Thai Airways International Public Company Limited (SET: THAI) dropped by 8.03% or THB 0.55 to THB 6.30, with a trading value of THB 612.81 million.
Asia Aviation Public Company Limited (SET: AAV) plummeted by 10.77% or THB 0.14 to THB 1.16, with a trading value of THB 338.07 million.
Bangkok Airways Public Company Limited (SET: BA) lost 10.61% or THB 1.90 to THB 16.00, with a trading value of THB 313.49 million.
Amid escalating geopolitical tensions and surging energy prices, Thai aviation stocks are facing increased headwinds, according to a recent analysis by Krungsri Securities (KSS). The brokerage highlights that the sector is under pressure due to two primary factors: declining revenues and rising costs.
Firstly, heightened conflict in the Middle East is triggering travel restrictions in affected regions, as well as causing passenger concerns about safety. This is expected to dampen travel demand, not only within directly impacted areas but also in neighboring regions.
Secondly, rising fuel costs—jet fuel accounts for approximately 30-40% of airlines’ total operating expenses—are set to exert significant pressure on the sector’s profitability. However, Krungsri notes that the impact will vary among different carriers depending on their cost structures and profit margins.
Cost risks
A low-cost carrier like Asia Aviation (AAV) is most exposed to rising fuel prices due to its relatively low operating margins. Should jet fuel prices rise from the base assumption of $85 per barrel to a range of $89.2–114.2 per barrel, AAV could quickly swing into losses once prices surpass $97.5 per barrel.
For Thai Airways (THAI), while less sensitive than AAV, the company remains vulnerable as fuel costs comprise more than 40% of its total expenses.
Revenue risks
Meanwhile, Bangkok Airways (BA) faces the highest revenue risk due to its significant share of passengers coming from Europe and the Middle East (around 20%), and its income dependence on codeshare flights (10-20% of revenues), many of which are with carriers from the affected regions. The closure of airspace in these areas could directly impact BA’s top line.
While THAI also derives approximately 40% of its revenue from European routes, its long-haul flights do not require stopovers in the Middle East, sparing it from direct impact, though additional flying distances could increase costs. AAV’s risk is the lowest among these airlines, as its main routes are within Thailand and ASEAN.
Sector Outlook and Recommendations
In the short term, Krungsri foresees persistent negative pressure on aviation stocks due to the ongoing Middle Eastern conflict. The sector’s operating results may see a potential decline of -5% to -36%. AAV is most sensitive to cost swings, whereas BA’s risks center around revenue shortfalls due to its customer base and route network.
Airport operators such as Airports of Thailand (AOT) and Cambodia-based air traffic service provider Samart Aviation Solutions (SAV) face lower risks since their revenues are not directly dependent on Middle Eastern routes. In fact, travelers from that region account for just 1–2% of Thailand’s total tourist volume, thus limiting the overall impact on the tourism industry.
Looking ahead, the brokerage maintains an overall bullish view on the sector, citing robust support from the recovery in Chinese tourism. Total tourist arrivals to Thailand are projected to reach 35.5 million in 2026, up 8% from the previous year. The airport operator AOT stands to benefit from higher passenger service charges, while BA’s growth prospects are buoyed by the development of U-Tapao Airport.
BA is viewed as the top-pick stock (Buy, target price THB 25), citing two key catalysts: the U-Tapao Airport development project and an anticipated high dividend yield of 5–6% annually. For 2H25, BA has announced a dividend of THB 0.70 per share, representing a yield of 4.3% (ex-dividend date: March 11; payment date: April 22).
