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Thailand’s airlines return to profitability amidst tourism revival
In 2023, Thailand's aviation sector experienced a remarkable recovery, with record profits driven by a resurgence in the country's tourism industry.
The aviation sector in Thailand has made a remarkable recovery, achieving record profits in 2023 due to the revival of the country’s tourism industry.
Key Takeaways
- Thailand’s aviation sector saw a remarkable recovery in 2023, with record profits driven by a resurgence in the country’s tourism industry.
- Thai Airways reported unprecedented profits of 28 billion baht, marking a significant turnaround from its pre-pandemic losses, and aims to restore shareholders’ equity and resume trading its shares by 2025.
- Thailand plans to double Suvarnabhumi airport’s capacity and position itself as an aviation hub in the Asia Pacific region, with significant investments in airport expansions.
- The permanent visa-free agreement between Thailand and China is expected to stimulate post-pandemic recovery by easing travel for citizens of both countries, particularly Chinese tourists, who were a significant portion of Thailand’s pre-pandemic tourist arrivals.
Airlines and tourism-related businesses listed on the Stock Exchange of Thailand (SET) saw a significant shift from losses to substantial profits. Thai Airways reported unprecedented profits, while Bangkok Airways and Thai AirAsia also experienced profitable years.
The sector’s total profit reached 31.4 billion baht, which increased to 40 billion baht when including the operations of Airports of Thailand (AOT). This marks a significant turnaround from the 21 billion baht loss recorded in 2022, which also included AOT’s figures.
Thai Airways plans to restore shareholder equity and resume trading its shares by 2025, while Thai AirAsia anticipates a strong year ahead with the return of Chinese tourists and new flight routes.
Bangkok Airways had a profitable year, with earnings surpassing 3.1 billion baht. This success is credited to the industry’s recovery and strategic partnerships, including the collaboration with Singapore Airlines. Additionally, the airline has code-share agreements with 28 other airlines, all aimed at making travel to and from Thailand and neighboring regions more convenient.
Thailand plans to double Suvarnabhumi airport’s capacity
Thailand aims to position itself as an aviation hub by upgrading regional airports, building new ones in tourist hot spots, and utilizing the capabilities and assets of Thais to develop existing airports.
The Thai government plans to expand Suvarnabhumi airport in Bangkok, aiming to double its annual capacity to 150 million passengers.
This expansion includes the addition of a third runway to increase the airport’s handling capacity. Similar upgrades are planned for Don Mueang airport in Bangkok and other regional airports to support the country’s tourism industry.
The government aims to position Thailand as an aviation hub and leverage its strategic location in the Asia Pacific region. The investment for these expansions is estimated at around 100 billion baht and will be funded mainly from internal cash flow.
Thailand and China “visa-free era” begins
A permanent visa-free agreement between Thailand and China, took effect on March 1. This agreement is expected to significantly ease travel for citizens of both countries.
Chinese tourists were the largest group before the pandemic and accounted for a significant portion of Thailand’s tourist arrivals. The visa exemption aims to enhance people-to-people exchanges and is expected to stimulate the post-pandemic recovery.
The Association of Thai Travel Agents (ATTA) anticipates a daily influx of over 20,000 Chinese visitors starting from March 1, following the permanent waiver of visa requirements between Thailand and China for their respective citizens.
Thailand initially implemented a temporary visa exemption in September last year for visitors from China and Kazakhstan, followed by India and Taiwan in November. The temporary visa waiver for citizens of China and Kazakhstan expired on February 29, but Chinese tourists can still visit Thailand under the permanent free visa policy, which started on March 1.
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