Low-cost carriers saw share prices falling nearly 7% in morning trade in Bangkok on Friday after they reported losses due to tough competition and higher fuel costs.
Asia Aviation Plc, AirAsia Group Bhd's partner in Thai AirAsia, reported a loss of 306 million baht for its April-June period versus a profit of 170 million baht a year ago, sending its shares down over 4%.
Losses at rival Nok Air Plc widened to 830 million baht in the quarter versus losses of 650 million baht a year ago. Nok's share prices were trading 7% lower.
Despite the tourism boom, Thai airlines have struggled due to higher jet fuel prices, a drop in passengers from off-peak travelling and stiff competition.
The country expects tourist arrivals to reach 37.5 million this year, up 6% from 2017.
Nok Air, the budget arm national carrier Thai Airways International Plc, saw revenue dropping 1% to 3.35 billion baht.
Thai AirAsia is planning to add more routes between India and Southeast Asia in the next quarter to minimise the risk of depending on a major customer base in the region, the airline said.
"Higher fuel costs have been a challenge with fuel being a major operating cost for any airlines," Thai AirAsia CEO Santisuk Klongchaiya said in a statement.
Analysts say tourist seasonality next quarter should help recovery and that plans to introduce a fuel surcharge could partly offset higher jet fuel prices.