Krungsri Securities (KSS) maintains a positive outlook for Bangkok Airways Public Company Limited (SET: BA), despite recent negative sentiment that has weighed heavily on the airline’s share price. Since the onset of the Middle East conflict, BA shares have plunged by 22%. However, the firm’s underlying fundamentals remain solid, underpinned by strong advance ticket bookings on the key Samui route and proactive jet fuel hedging strategies.
Advance ticket sales for flights to Samui continue to impress, indicating robust year-on-year growth: March 2026 bookings are up 10%, May up 15%, June up 11%, July up 22%, August up 17%, and September up 20%. This consistent increase reflects sustained customer interest and travel demand, helping to cushion the short-term volatility caused by the conflict.
In 2026, European customers constituted the primary source of revenue for BA, accounting for 46% of total sales, while the Middle East contributed just 7%. Combined, these regions represent 53% of revenue. Additionally, only a small fraction of customers book via European (5%) and Middle Eastern airlines (2%), which limits exposure to disruptions from these channels.
Although the Middle East tensions introduced uncertainty, actual travel demand impacts remain limited. There have been no ticket cancellations reported as most customers have chosen to reschedule. Furthermore, data from the Civil Aviation Authority of Thailand (CAAT) shows that Samui Airport passenger volumes declined by no more than 7% during the first nine days of March 2026.
BA has proactively hedged 30% of its estimated 2026 jet fuel consumption at a favorable price of approximately $80 per barrel. With its hedging policy limiting exposure to under 70% over a one-year horizon, this move helps the airline insulate itself from the sudden fuel cost surges.
A significant upside catalyst for BA shares is progress on the U-Tapao airport development project. Following the signing of the memorandum of understanding (MOU) in January 2026, construction is slated to commence in the second quarter. The company is currently renegotiating certain investment conditions, after transferring the responsibilities related to the government’s high-speed rail network.
KSS projects that BA’s passenger volumes and average ticket prices for 2026 will remain stable year-on-year, while the passenger load factor is expected to increase by 4%, despite a modest reduction in operational capacity (-2% to -5%).
The analyst firm estimates that even if the Middle East conflict persists for another 2 – 4 months, the downside to passenger volumes would be just 1% to 2%. In a worst-case scenario, normalized earnings could fall by 11% to 18%, but this is seen as a temporary setback with no significant effect on the target price.
Citing robust Samui route performance and positive momentum on the U-Tapao project, KSS reiterates its ‘Buy’ recommendation and maintains the target price at THB 25 per share. The recent share price decline is viewed as an overreaction to short-term risks, while the long-term growth trejectory—and underlying financial stability—remains intact.
