• 
• 

Published on April 16, 2008

Dawadee Teeraapisakkul, an analyst at Kim Eng securities, said AOT would bear more burdens than benefits because the airports in 26 provinces are not profitable.

"If AOT has to manage the 26 airports, its revenue along with net profit is likely to drop," she said.

She said that operating an airport costs a huge amount of money, while AOT's major revenue is driven from Suvarnabhumi and Don Mueang airports. In addition, the company's commercial revenue from King Power has been suspended. This factor should make it difficult for AOT to turn the unprofitable airports from loss into a profit.

An analyst from Asia Plus securities said the provincial airports continue making losses.

The analyst said that during a visit to AOT's management recently, executives insisted they had no plan to take on the operation of all the airports.

If AOT is forced to manage the provincial airports, Asia Plus forecast its revenue will decline. The brokerage believes AOT will pay more attention to handling the King Power case than managing provincial airports.

However, an analyst at Kiatnakin Securities said that management of the provincial airports should help AOT generate long-term profit.

AOT is experienced in the management of Suvarnabhumi and Don Mueang airports. Hence, it should not be hard for it to manage the provincial airports, said Benjaphol Suthiwanish, an analyst at Kiatnakin Securities.

He said that these airports, promoted by the Tourism Authority of Thailand as tourism destinations, would be beneficial to AOT.

Benjaphol said that if AOT operates the provincial airports, it is expected to book a profit in the fourth year.

"We cannot forecast AOT's revenue this year because there are many unfavourable factors, especially in the case of King Power," he said.

Asia Plus maintained a "buy" recommendation on AOT's shares, assuming that once it passes the hurdle of the King Power case, it will record an increase in net profit. AOT posted Bt19.50 billion in operating revenues last year. Its 2007 net profit was Bt1.09 billion, an 89.5 per cent drop from Bt10.47 billion in 2006.

Sucheera Pinijparakarn

The Nation