AOT stirs a storm in a teacup

SINGAPORE, 30 October 2019: You could call it Monday madness when the Airports of Thailand’s president starts the week saying he intends to close Hat Yai and Chiang Rai airports over the next five years.

The ominous cloud gathering over the two airports turned into a storm in a teacup all within 24 hours.

Nation Multimedia reporters quoted the AOT president’s dire intentions word-for-word without employing their grey matter to dissect and identify the credible truth or outcomes. They faced the embarrassment of rewriting their story a day later.

The initial report quoted AOT president Nitinai Sirismatthakarn prattling on about the lack of connecting services or in fact any internationals services of note at the two airports.

Hat Yai he concluded is “not a travel hub. People who travel to Hat Yai often find it difficult to catch a plane to other places. Visitors have gradually shifted from Hat Yai to Phuket to take advantage of the abundance of connecting flights and tourist attractions.”

Chiang Rai’s Mae Fah Luang Airport is “facing similar problems due to lack of connecting flights and facilities that have not yet been fully developed to attract foreign tourists,” he claimed.

Alarm bells should ring when the president of a leading public-listed company makes statements that could impact on its shareholders’ earnings.

AOT posted the incredible nonsense on its websites under “News Clippings” but failed to file any statement with the Stock Exchange of Thailand.

A loss of two airports with an annual footfall of 7 million passengers would no doubt perk the interest of shareholders.

Go back and check the annual reports and the independent broker analysis of AOT to see if there is a single reference to the possible closure of two of the six airports under its management.  Not a word, not a whisper, just the positive stuff of expansion, a massive investment in Chiang Rai and the development of new airports in Phuket and Chiang Mai.

AOT manages six airports in Thailand with a footfall of 141 million passengers a year (fiscal year ending 30 September). All six airports boast potential customers wandering through airport shopping malls a captive audience ready to spend cash.

Nitanai correctly points out that passenger traffic declined at Hat Yai airport during the fiscal year 2018/2019 to slightly more than 4 million passengers down 5.56%. But he came to the wrong conclusion when he assumed Hat Yai residents would tolerate the closure of their airport and drive to Phuket to board flights to Bangkok or anywhere else.

“In the next five to six years, AOT is planning to merge the Hat Yai Airport with Phuket Airport,” he said. “We are also drafting a plan to construct a second airport in the Phuket area.”

We have to assume that AOT doesn’t do its homework. If the president clicked on Google Map before speaking, he would have discovered that the distance from Hat Yai to the site of a new Phuket airport on the mainland is 404 km and by car, the journey would take five hours and 30 minutes.

In truth, closing down Hat Yai and Chiang Rai airports would go beyond Nitanai’s job description. The AOT could relinquish its management of the two airports when the leases end, but that is considerable distance off closing the doors on air travel for the residents of both Hat Yai and Chiang Rai.

During the fiscal year ending 30 September, Chiang Rai’s airport recorded a passenger footfall of 2.9 million, representing an increase of 5.30%.

Unlike Hat Yai, the airport has direct international airline services to eight cities in China including Hong Kong and Hangzhou due to come online this December.

Chiang Rai’s airport is leased to the AOT, and any talk of decommissioning it would face enormous opposition from residents and the business community. It could also open the door for a competitive airport management company such as Bangkok Airways to make a bid.

Talk of Chiang Rai residents driving 200 km to a new airport on the outskirts of Chiang Mai is about as absurd as Nitinai’s argument that an era of high-speed train travel between Bangkok and Chiang Rai would further diminish the airport’s economic value.

Train travel of any kind remains the stuff of dreams and even if it became a reality in Chiang Rai, it would be geared to transporting freight from China through Laos and would have little or no impact on the airport’s ability to attract passengers.

Considering the Thai government’s clear commitment to disperse the benefits of tourism across all provinces, Nitinai needs to assure the business communities of Hat Yai and Chiang Rai that their airports have a future.

A day after the AOT president’s diatribe, the ministry of transport reassured residents of the two provinces that their airports are safe.

A storm in a teacup resolved for now.