"New Bangkok airport likely to halve AAT profits"

Saturday, June 29, 2002

New airport likely to halve AAT profits 
Landing fees to rise, handling fees to start 
By Amornrat Mahitthirook 
Thailand - The Bangkok Post


The Airports Authority of Thailand (AAT) expects its annual profit to
drop by 50% after Nong Ngu Hao airport opens in 2005.

AAT governor Therdsak Sajjarak yesterday said running the new airport
would incur higher costs for his agency and its annual profit should
drop to about four billion baht from eight billion baht expected in the
next fiscal year.

``It will take AAT some time to bring its profit back to that level,''
ACM Therdsak said.

In the first eight months of fiscal 2002 (from October last year to
May), AAT posted a profit of 5.66 billion baht, up 8.7% from the same
period in the previous fiscal year.

Deputy AAT governor Bancha Pattanaporn, meanwhile, said it was normal
for new airports to suffer losses in the first few years of operations
because of high management and investment costs including interest
payments.

However, he said, Nong Ngu Hao would probably be an exception since
several of its costs were lower than those borne by British, Singaporean
and Hong Kong airports.

``The new airport will post a profit but AAT will need some time to
bring its profit back to normal. How long that will take will depend on
the number of passengers and the global economy,'' he said.

AAT plans to increase its landing fees, which it considered too low, and
introduce ground handling fees that have never been collected in its
23-year history.

Previously, AAT wanted to raise its landing fees by 20% by this October
but the plan was suspended due to the crisis in the airline industry
following the Sept 11 terrorist attacks in the United States. Mr Bancha
said AAT might increase its landing fees after the opening of Nong Ngu
Hao airport or in the next few years along with the introduction of its
ground handling fees.

Without ground handling fees, provincial airports were facing losses, he
said.

AAT also plans to continue generating revenue from Don Muang airport,
its major source of income, after the opening of Nong Ngu Hao airport.


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