Airports of Thailand announces relief package for hard-hit operators

THAILAND. Airports of Thailand (AoT) has today announced a range of rent relief measures for commercial operators affected by the COVID-19 health crisis and the slump in travel to and from Thailand.

AoT is the first airport owner to publicly reveal a relief package. It operates Suvarnabhumi, Don Mueang International, Phuket International, Chiang Mai International, Hat Yai International, and Mae Fah Luang-Chiang Rai International airports.

In a note on its Investors Relations page, AoT said: “The severe pneumonia outbreak caused by the novel coronavirus (COVID-19) in China has currently affected Thailand’s tourism industry due to outbound travel restrictions imposed by the Chinese government on group travel from 27 January 2020.

“The situation has also raised fears over travellers worldwide to travel to Thailand and the countries in the region.”

How much things can change in a year. During the 2019 Chinese New Year, King Power International’s business at Suvarnabhumi Airport in Bangkok was booming. 12 months on, the operation has been stricken by the COVID-19 crisis.

As revealed by The Moodie Davitt Report earlier this month, AoT’s anchor retailer King Power International has been particularly hard hit by the crisis. Chinese group travel to its downtown stores has disappeared despite the retailer’s stringent safety measures.

According to a report in Thai media The Star, Tourism and Sports Minister Phiphat Ratchakitprakarn expects tourist arrivals to plunge by -50% in the first half due to the crisis. Tourist numbers from 1-9 February were down -43.47% with Chinese visitors, the lifeblood of Thai travel retailer, off by a startling -86.55%.

The respected Bangkok Post reported today that Thai tourism has been dealt another “massive blow” after 80% of Japanese tour groups cancelled packages. This has prompted tour operators to urge airlines to reduce flight frequencies as Thais travelling to Japan also dropped by -20%, the report said.

Anake Srishevachart, President of the Thai-Japan Tourism Association, told the title that 80% of Japanese groups have already cancelled packages to Thailand as concerns about the pandemic rise. The Japanese inbound market ranked third for revenue contribution to Thai tourism last year behind China and Malaysia.

AoT said in its statement today that the government Cabinet had resolved to establish various measures for supporting Thailand’s ailing tourism industry. Thai Prime Minister Prayut Chan-o-cha subsequently issued orders requiring all government sectors to help reduce economic and social impacts in accordance with the Cabinet’s resolutions.

At a board meeting today, AoT approved the following assistance measures for operators at its six airports:

#1. Offer a 20% discount on fixed monthly fees during the period 1 February 2020 – 31 January 2021 and entrust the management to consider discount guidelines during 1 February 2021 – 31 March 2022 to be further proposed to the AoT Board of Directors for consideration

#2. Offer a discount on percentage-based fees with monthly/annual minimum guarantees. The percentage-based fees, except for monthly/annual minimum guarantees, shall only be collected during 1 February 2020 – 31 March 2022.

#3. AoT reserves the right to make changes, corrections, cancellations of conditions of assistance measures for operators as in items 1 and 2, whenever appropriate, in accordance with the situation and impacts caused by the COVID-19 outbreak.

#4. Extend payments of concession fees during February – July 2020 for another six months if requested by the operators.

#5. In case of operators who have been granted concessions or have been governed by the Public-Private Partnership Act, AoT shall proceed according to the law. As a result, AoT expects that the above-mentioned measures will cause a -5% decrease in its revenue based on the operating results in the fiscal year 2019.

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