Thailand’s Aviation Sector Set for Growth as Demand for Jet Fuel Surges

Tuesday, September 17, 2024

Bangkok Aviation Fuel Services Plc (BAFS) Projects Robust Expansion

In recent developments, Bangkok Aviation Fuel Services Plc (BAFS) has indicated that Thailand’s aviation industry is poised for substantial growth. This anticipated growth is attributed to increasing travel and rising demand for jet fuel. The company, which provides refueling services at Suvarnabhumi and Don Mueang airports, is expected to benefit significantly from this upswing in aviation activity.

Surge in Air Travel and Jet Fuel Consumption

Following a period of stagnation during the pandemic, the aviation industry is experiencing a revival. BAFS, reflecting this trend, has projected an impressive 18% increase in year-on-year revenue, reaching 3.6 billion baht this year. A primary driver of this growth is the surge in air travel, which has led to heightened consumption of jet fuel.

According to the Department of Energy Business, jet fuel usage in Thailand saw a marked increase from January to June this year. During the first half of the year, a combination of peak tourist season, a visa-free scheme, and an uptick in flights during extended holidays contributed to a 17% rise in jet fuel consumption. This figure climbed to 15.7 million liters per day, up from 13.5 million liters per day.

BAFS anticipates a 16% increase in jet fuel sales year-on-year, projecting a total of 5 billion liters in 2024, compared to 4.3 billion liters last year.

Foreign Tourist Arrivals and Infrastructure Developments

The Bank of Thailand has reported a rise in foreign tourist arrivals, with the number reaching 3.1 million in July, up from 2.7 million the previous month. This increase was largely driven by visitors from Malaysia, China, Russia, and Europe. However, there was a noted decline in tourists from the Middle East and India.

In response to the growing number of air travelers, Airports of Thailand (AoT) has embarked on plans to enhance Suvarnabhumi Airport’s facilities. By 2031, AoT aims to accommodate up to 80 million passengers annually. Last September, AoT inaugurated a new satellite terminal at Suvarnabhumi, raising the airport’s annual passenger capacity from 45 million to 60 million. The AoT is also revising its master plan for a ten-year expansion to meet the government’s objective of positioning the airport among the top 20 globally within five years.

Industry Implications

This anticipated growth in the aviation sector is expected to have several implications:

• Increased Demand for Jet Fuel: The rise in passenger numbers and flight frequencies will continue to drive up jet fuel consumption, benefiting companies like BAFS that supply this crucial resource.
• Infrastructure Upgrades: The expansion plans for Suvarnabhumi Airport reflect a broader trend of investing in airport infrastructure to keep pace with rising passenger numbers. This includes new terminals and facilities designed to enhance the travel experience.
• Economic Impact: The influx of tourists and the subsequent increase in air travel are likely to have a positive effect on the local economy. This includes boosting revenues for aviation-related businesses and supporting employment in the sector.

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