AoT eyes other businesses
Agency says Covid could hit liquidity
The Airports of Thailand (AoT) plans to venture into other businesses to fill the large hole in revenues left by the Covid-19 pandemic as the aviation and travel industries are unlikely to recover to pre-Covid levels until 2023.
AoT president Nitinai Sirismatthakarn said the AoT's challenge is to find new revenue streams between 2021-2022 when the number of air travellers to the country is estimated to be around 55 million and 128 million respectively.
This year's passenger arrivals are expected to drop sharply by 72%, or to 38.81 million, compared with 141 million last year.
According to Mr Nitinai, AoT is unlikely to post losses this fiscal year ending September as the first four months of this year saw profits of 10.9 billion baht. However, it may face liquidity woes in 2021 and 2022 due to the predicted low passenger traffic.
He said one of the business ventures AoT is investing in to supplement income is a pre-export product quality certification centre, known as "Certify Hub", at Suvarnabhumi airport. A company to operate Certify Hub will be registered next month with operations set to begin in December.
Another side business is the Suvarnabhumi airport city project which is scheduled to launch in September-October, he said. Under the scheme which includes development of a shopping mall and facilities for aviation businesses, AoT plans a joint investment with the private sector.
Mr Nitinai said AoT is prepared to extend the contract involving the use of its 723-rai plot of land by 20 years, from 2032 to 2052, to give investors incentives.
The agency also hopes to make more money from a subsidiary firm set up by AoT to provide ground services. The company is ready to expand to Phuket airport after Don Mueang.
"The aviation industry's future looks bleak and remains unstable until we have a vaccine. We have a risk of liquidity problems in 2021-2022 and we have come up with contingency plans.
"Even so this is based on the condition that there is no second wave of infections," he said.
Mr Nitinai said the agency has assessed the impacts of the Covid-19 pandemic and concluded that four related businesses -- food services, cargo services, ground services and maintenance services -- are at risk and the disruption will affect AoT's airport services and operations.
The most vulnerable are cargo and ground services which are handled by a few operators, he said, adding AoT will report the issue to its board along with measures to mitigate the impacts if current operators are forced to shut down.
As for debts owed by Thai Airways International (THAI), he said the amounts are not large enough to affect airport services. The debts are divided into two portions: 700-800 million baht in overdue payments and 2 billion baht over a land use dispute.
Existing contracts between AoT and the airline will be revised and turned into a public-private partnership (PPP) after THAI lost its status as a state-owned enterprise (SOE) when the Finance Ministry sold its stake in the airline to below 50%.