Thailand’s airlines are returning to profitability amid a revival in tourism

Thailand’s airlines are returning to profitability amid a revival in tourism

Thailand’s aviation sector has made a remarkable recovery, achieving record profits in 2023 due to the revival of the country’s tourism industry.

Key findings

  • Thailand’s aviation sector saw a remarkable recovery in 2023 with record profits led by the country’s resurgent tourism industry.
  • Thai Airways reported unprecedented profits of 28 billion baht, marking a significant turnaround from pre-pandemic losses, and aims to restore shareholder capital and resume trading in its shares by 2025.
  • Thailand plans to double the capacity of Suvarnabhumi Airport and position itself as an aviation hub in the Asia-Pacific region, with significant investment in airport expansion.
  • The permanent visa-free agreement between Thailand and China is expected to boost post-pandemic recovery by easing travel for citizens of both countries, especially Chinese tourists, who were a significant portion of Thailand’s tourist arrivals before the pandemic.

Airlines and tourism-related businesses listed on the Stock Exchange of Thailand (SET) saw a significant shift from losses to significant gains. Thai Airways reported unprecedented profits, while Bangkok Airways and Thai AirAsia also had profitable years.

Total sector profit reached 31.4 billion baht, rising to 40 billion baht when Airports of Thailand (AOT) operations are included. This marks a significant turnaround from the 21 billion baht loss recorded in 2022, which includes AOT’s figures.

Thai Airways plans to restore share capital and resume trading in its shares by 2025, while Thai AirAsia expects a strong year ahead with the return of Chinese tourists and new flights.

Bangkok Airways had a profitable year, with profits exceeding 3.1 billion baht. This success is due to the recovery of the industry and strategic partnerships, including the collaboration with Singapore Airlines. In addition, the airline has codeshare agreements with 28 other airlines, all aimed at making travel to and from Thailand and neighboring regions more convenient.

Thailand plans to double capacity at Suvarnabhumi Airport

Thailand aims to position itself as an aviation hub by modernizing regional airports, building new ones in tourist hotspots and using Thailand’s capabilities and assets to develop existing airports.

Thailand’s government plans to expand Bangkok’s Suvarnabhumi Airport, aiming to double its annual capacity to 150 million passengers.

This expansion includes the addition of a third runway to increase the airport’s service capacity. Similar improvements are planned for Bangkok’s Don Mueang Airport and other regional airports to support the country’s tourism industry.

The government aims to position Thailand as an aviation hub and capitalize on its strategic location in the Asia-Pacific region. The investment for these expansions is estimated at around 100 billion baht and will be financed mainly from internal cash flows.

The “visa-free era” of Thailand and China begins

A permanent visa-free agreement between Thailand and China entered into force on March 1. This agreement is expected to significantly facilitate travel for citizens of both countries.

Chinese tourists were the largest group before the pandemic and accounted for a significant portion of tourist arrivals in Thailand. The visa waiver aims to improve people-to-people exchanges and is expected to boost post-pandemic recovery.

The Association of Thai Travel Agents (ATTA) expects a daily influx of more than 20,000 Chinese visitors starting March 1, following the permanent lifting of visa requirements between Thailand and China for their respective nationals.

Thailand initially introduced a temporary visa waiver 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 visa-free policy that began on March 1.

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