AoT pushes for passenger fee hike

Airports of Thailand (AoT) urged authorities to allow it to hike the passenger service charge (PSC) at airports for the first time in six years.

Sita: Doesn’t expect a passenger backlash

The state-owned firm, which runs the kingdom's six key airports including Suvarnabhumi, wants the long sought-after rise to be 800 baht, up from 700, for international passengers, and 150 baht, up from 100, for domestic travellers. The fee hike would take effect at the end of this year.

If approved by the Department of Civil Aviation (DCA), it would result in 2 billion baht in incremental revenue for AoT, which already booked the increase in its 2013 revenue projection.

AoT chairman Sita Divari, who vowed to vigorously pursue the increase, said the hike reflects real costs and the money should be directed towards raising passenger service quality at airports.

The cost to serve a domestic passenger is about 300 baht while an international passenger is 400-500 baht, he said.

PSC accounts for 45% of AoT's revenue, or roughly 13 billion baht a year.

The PSC was last adjusted on Feb 1, 2007, pushing the international fee from 500 baht to 700 and the domestic fee from 50 baht to 100.

"I don't really think passengers will be affected by such a hike," Mr Sita insisted, discounting authorities' concern about the impact on consumers.

The PSC is normally included in the price of airline tickets.

Kiatnakin Securities' latest report noted the proposed hike may push up AoT's net profit by 20-25% a year. The firm projected a net profit of 11.30 billion baht for the fiscal year ending September 2013, or 7.9 baht a share, nearly double the previous year's 6.50 billion (4.5 baht a share).

AoT expects passengers passing through its six airports to soar to 85 million this fiscal year, up from 71.5 million a year ago.

Aircraft movements are projected to 550,000, up 14.5% year-on-year.

Meanwhile, AoT has not decided on the means for raising 17-20 billion baht for its 2016-2017 Suvarnabhumi expansion project. The options include direct borrowing, issuing bonds or creating an infrastructure fund.

AoT earlier opted for setting up an infrastructure fund, but the sluggish capital market made it reticent about raising funds via the bourse.

"We still have time to consider the best alternatives," said Supaporn Burapakusolsri, senior vice-president for planning and finance at AoT.

Shares of AOT closed on the SET at 168.50 baht on Friday, up 11.50 baht, in trade worth 1.98 billion baht.

About the author

Writer: Boonsong Kositchotethana
Position: Deputy Editor Business