Thailand's Airlines Could Face Earnings Pressure From Rising Fuel Costs — Market Talk

Thailand's airlines' 2Q-3Q earnings outlook appears clouded by a marginal drop in revenue and rising fuel costs, Maybank Securities (Thailand) analyst Boonyakorn Amornsank says in a report. The airline industry is expected to be negatively affected by the prolonged war in the Middle East, as fuel costs account for about one-third of total operating expenses for airlines in Asia. Higher jet fuel prices barely hit airlines' 1Q operations, as purchases are typically made a month ahead. However, the analyst expects operations to take a full hit in 2Q from elevated fuel costs. Maybank maintains a neutral rating on Thailand's aviation sector, pegging Bangkok Airways and Airports of Thailand as its top picks.(amanda.lee@wsj.com)