Slight losses expected from low-cost carrier relocation
Airports of Thailand Plc expects to show a small decline in earnings, following a special discounts offered to low-cost airlines as incentives for relocation from Suvarnabhumi Airport to Don Mueang Airport.
Bualuang Securities said in its research note that AOT has agreed to provide discounts on landing and parking charges and rental fees) to low-cost carriers (LCCs) to return to Don Mueang Airport. The management estimated that earnings would decline by Bt245 million during the fiscal years 2013-2015 under the worst-case scenario where no additional traffic uses the freed up capacity at Suvarnabhumi Airport.
"That would be much shallower than our assumption of a Bt900 million profit fall."
Don Mueang’s soft opening is slated for August and it is expected to start a full-scale service by October. The biggest low-cost airline in focus is Thai AirAsia, which caters services to 8 million passengers per annum.