Budget airlines keep Thai airports on growth trajectory

Budget airlines keep Thai airports on growth trajectory

BANGKOK - Air traffic at Thailand's six main airports run by Airports of Thailand climbed to a record last year, boosted by aggressive expansion at budget airlines that were unfazed by a political crisis and a shortage of airport capacity.

Total passenger numbers rose 2.5 per cent to 90.53 million in 2014, with low-cost carriers - which focus primarily on domestic travel - accounting for nearly 40 per cent of the total, up from less than 10 per cent a decade ago.

Budget airlines such as Thai AirAsia and Nok Airlines Pcl are building up fleets and stepping up fare competition, which has drawn out domestic travellers.

Business was also buoyed by foreign travellers avoiding Bangkok's political troubles and heading instead to the provinces.

Domestic traffic at AOT's airports grew at a brisk 16 per cent pace last year even as international traffic dipped 5.6 per cent.

AOT plans to expand its capacity at its three largest airports by an average of 53 per cent over the next four years to ease capacity bottlenecks and reap the rise in traffic.

Optimism about its prospects boosted its shares to a record high of 333 baht (S$13.80) on Feb 3 and they are up 68 per cent since the May coup, compared with a 17 per cent rise in Bangkok's benchmark SET index .

"The trend will continue over the next five years given that many low-cost carriers like AirAsia have already announced fleet expansion plans," said Parin Kitchatornpitak, analyst at KGI Securities.

He added that the expansion of AOT's three main airports would help to support growth in the Thai tourism industry.

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