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Published on September 18, 2007

One Ayudhya Securities analyst said the crash might erode passengers' confidence in travelling by air in the short-term but that this would have barely any effect on AOT's earnings.

AOT operates six international airports, including Suvarnabhumi, Don Mueang, Chiang Mai, Phuket, Hat Yai and Chiang Rai.

"The effects of an aeroplane crash is not severe compared with terrorism or an outbreak [of disease]. I think its impact will last no longer than two weeks and not hurt Airports of Thailand's financial performance," the analyst said.

AOT shares closed yesterday at Bt58.50 apiece, up 0.86 per cent from last Friday.

Phuket Airport resumed operations at 5pm yesterday after being shut down because of Sunday afternoon's crash.

A Thanachart Securities analyst said the tragedy would deliver a short-term impact to Thailand's tourism industry.

Travellers and flights to Phuket accounted for 10 per cent of all passengers and flights using AOT airports in the nine months to June 30, and Phuket Airport contributed 9 per cent of AOT's net profit, the analyst said.

In the first nine months of its fiscal year [which ends on September 30], AOT saw its net profit drop significantly from Bt9.12 billion in the first nine months of the previous fiscal year to Bt1.56 billion, due to higher expenses, depreciation and maintenance expenditures.

AOT's medium-term business outlook remains uncertain, because of the absence of revenue from King Power Duty Free, compensation payments for sufferers of noise pollution from Suvarnabhumi Airport and maintenance costs, the analyst said.

He forecast that Airports of Thailand would book operating losses over the next two years.

Kim Eng Securities (Thailand) recommended "sell" on AOT shares. It predicts the company will plunge to a net loss of Bt258 million in its current fiscal year after making a net profit of Bt10.38 billion in the previous fiscal year.

Although the company has high revenue, it must pay compensation to those living near Suvarnabhumi Airport, and it has no more income from King Power, the analyst said.

The broker estimates a fair value of Bt47.50 apiece next year for AOT shares.

A KGI Securities (Thailand) analyst said the Phuket tragedy would "jerk" AOT and Thai Airways International in the short term. However, tourists will eventually understand the situation and once again travel to Thailand normally.

Siriporn Chanjindamanee, The Nation