Air Chief Marshal Manat Chavanaprayoon, Director General of Civil Aviation Authority of Thailand (CAAT), stated that since the conflict in the Middle East began at the end of February, CAAT has closely monitored the situation to assess its impact on Thailand’s overall aviation industry. Findings show that Thailand has not suffered negative impacts from the situation, but instead has benefited from changes in passenger travel behavior on European routes.
Previously, passengers had to transit or stop over in the Middle East, but now they are opting for direct flights without layovers. As a result, airlines offering direct flights to Europe will greatly benefit, especially Thai Airways International Public Company Limited (SET: THAI or Thai Airways), which operates direct flights to Europe along routes that do not cross the conflict zones. According to inquiries, after the escalation of tensions in the Middle East, Thai Airways has reached 100% booking capacity for its European routes.
Nevertheless, CAAT continues to closely monitor other impact factors, such as rising oil prices, which may drive up ticket prices. In response, the agency has prepared contingency plans, especially for the upcoming Songkran Festival. CAAT has coordinated with airlines to reduce the ticket price ceiling by 30% and to switch to larger aircraft to increase seating capacity.
At the same time, CAAT will coordinate with the Ministry of Finance to consider whether the excise tax on fuel can be reduced, and discuss with Airports of Thailand Public Company Limited (SET: AOT) ways to reduce various service fees and charges for airlines to ease the impact of rising fuel prices. It is acknowledged that this could affect AOT’s revenue, but is a necessary help during this temporary crisis.
Additionally, even though tourists from the Middle East are not among Thailand’s top five visitors (which are China, Malaysia, Russia, India, and South Korea), they are high-purchase-power travelers. A decline in their numbers could affect other sectors, such as hospitals and health services—since many Middle Eastern travelers come to Thailand for medical treatment—as well as tourism-related businesses like hotels, malls, and restaurants.
ACM Manat further stated that for the summer flight schedule (which runs from March 30 to October 26 each year), flight slot allocations are currently underway. The number of flights airlines have applied for is 5-8% higher than in the same period last year, reflecting that global aviation continues to grow and Thailand remains a top tourist destination. The country is also benefiting from tourists shifting their destinations from the Middle East to more peaceful and stable regions, with Thailand being a prime choice.
Mr. Sirote Duangratana, Senior Executive Vice President (Business Development and Marketing), AOT, stated that during the initial phase of the Middle East clashes, 70-80% of airlines requested flight cancellations, with Suvarnabhumi Airport being the most affected. However, the flight cancellation rate has now dropped to about 30-40%. AOT is in the process of finding incentive measures to encourage airlines to increase flights on other routes to offset the impact from the canceled flights.
