THAILAND. State-owned Airports of Thailand – the operator of the country’s two busiest international airports, Bangkok’s Suvarnabhumi and Don Mueang International and others – posted a double-digit surge in non-aeronautical revenue in fiscal 2018.

The company – which runs six passenger airports – reported non-aeronautical income of THB26,551.15 million (US$806.2 million) for the financial year ending September 2018, a rise of +10.3%.

AOT said this was due to an increase in concession revenue of THB1,958.71 million (US$59.5 million) or +13.3%, mainly derived from King Power International’s duty free and related businesses. Concessions as a share of non-aeronautical revenue grew from 61% in FY2017 to 63% in FY2018 to reach THB16,710.43 million (US$507.4 million).

Non-aeronautical revenue breakdown for FY2018.

Underlying the concession growth was an increase in the number of passengers. Across AOT’s six airports this number reached 139.52 million (+8%) driven by an increase in international passengers (the split was 80.5 million international and 59.0 million domestic).

Concession revenue took an increased slice of non-aeronautical revenue in 2018 versus 2017.

Commenting on the year as a whole, AOT management said: “During October 2017 to September 2018, the aviation industry improved compared to the same period last year. This is in line with growth in the tourism sector. Support from the Thai government contributed to such growth. especially tourists from China.

“The rapid expansion of low-cost airlines led to price competition benefiting passengers. Moreover, the International Civil Aviation Organization has removed Thailand from the list of (countries with) significant safety concerns. As a result, Thai airlines can expand its service and increase its number of flights.”

Luxury retail at Bangkok’s Suvarnabhumi International Airport.

A requirement for aviation infrastructure

AOT expects strong development of airport services in Thailand to continue due to intense aviation competition together with the increase in demand for air travel. “This requires a concrete action plan to accommodate the demand of air transportation that is expected to increase in the future, especially for the development of aviation infrastructure,” said AOT.

As part of this process, AOT has approved the revision of its master plan for its six airports to improve their ability to handle a significant increase in aircraft traffic and passenger volume. AOT has expanded the capacity of its gateways in line with the 12th National Economic and Social Development Plan.

In addition, the government has a policy to promote secondary-city tourism to help mitigate the high tourist densities found in primary cities. This will also facilitate the passenger congestion at Suvarnabhumi and Don Mueang International airports.

AOT’s overall financial results can be seen in the table below.