Thailand’s reopening fails to save businesses inside airports, AOT says

Airports of Thailand (AOT) said that business partners that had concessions granted by the company are unlikely to survive despite the country’s reopening in November.

This is due to lowered demand in the aviation industry that is unlikely to recover to pre-Covid levels yet. 

As a result, AOT announced additional relief measures late Thursday for businesses operating under concession contracts in all six of AOT-controlled airports nationwide. 

“Many concessionaires continue to terminate their contracts and are cautious in resuming their businesses,” AOT said in a statement, citing prolonged impact by the pandemic.

“Full business recovery is unlikely to be achieved by 2022,” it said.

The new measures will stretch the time of the existing measures, which will end by March 2022, for a year to March 2023. They also granted operators another year of concession period without requiring collateral.

Those existing measures include cuts in concession charges and other service charges, as well as an exemption of property tax. 

Falling share price

Following the announcement of new relief measures, AOT stock dropped over 4 per cent to 64 baht on Friday, the lowest in two months.

Analysts at KTB Securities revised down the company’s results in 2022 fiscal year to slip further to 7.7 billion baht of loss, from the previous 5.5 billion. 

Earlier AOT’s price rose up in accordance with the reopening of Thailand and the potential return of the tourism sector, but now the outlook has turned dark again. 

“The return of the Covid-19 outbreak remains the main risk that might threaten tourism recovery, since some European nations are facing record-high infections,” KTB said.

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