Jet fuel traders and jet service providers are revising their sales growth figures for jet fuel next year because the removal of the red flag on Thailand's aviation industry is expected to create more flight activity, industry officials say.
Last week's withdrawal of the red flag by the International Civil Aviation Organization (ICAO) should lead to more foreign tourists over the next few years, which could push jet fuel consumption higher, the officials said.
Jet fuel sales growth for 2018 was expected to be 3.7-4.0% when the red flag was still in effect.
Auttapol Rerkpiboon, chief operating officer of downstream petroleum business for PTT Plc, said demand growth for jet fuel could be 4% this year and above 4% next year.
Growth in demand for jet fuel is higher than for other fuel types, whose growth is only 1% this year, Mr Auttapol said.
He said sales volume for jet fuel in the first eight months of the year averaged 550 million litres a month, up 3.7% year-on-year.
"Several chartered flights from major international airlines are returning to Thailand after the removal of the red flag," Mr Auttapol said, and demand for jet fuel is expected to rise in tandem.
Prakobkiat Ninnad, managing director of SET-listed Bangkok Aviation Fuel Services Plc (BAFS), said the company is revising growth targets for sales volume and sales value after the removal of the red flag.
He said BAFS will monitor the moves of local airlines this year and early next year to see how they adjust.
BAFS forecast in June that sales volume growth would be 4% from last year's 5.88 billion litres worth 3.56 billion baht.
"The end of the red flag came at a time when we have only two months left in this year, so I don't expect to see any big change this year," Mr Prakobkiat said. "It will be clearer next year, when we can forecast higher growth."
Chairit Simaroj, managing director of Susco Plc, said the company expects sales growth in jet fuel of 10% this year, leading Susco to maintain its market share of 4%.
He said the number of outbound flights will grow significantly and Susco expects growth of 10% again next year. But competition among jet fuel providers is also set to intensify in line with rising demand.
Mr Chairit said sales of all fuel products from Susco could grow by 8% this year to 1.2 billion litres, with Susco's total revenue growing at the same rate to 20 billion baht.
Thailand had been under a red flag since early 2015, when an audit by ICAO raised significant safety concerns about the country's oversight of carriers, particularly surrounding the process of awarding new air operator certificates.
The red flag led to the disbanding of the Department of Civil Aviation and its replacement with the Civil Aviation Authority of Thailand.
