Thailand’s annual air traffic grew at a rate of 11% annually in the past decade, fueled by the country’s increasing popularity as a tourism destination—particularly for the Chinese.

This was facilitated by the development of low-cost carriers (LCCs), which grew at a rate of 20% in the same period. By 2019, LCCs carried over 50% of air traffic in the country as the chart below shows.

Especially in the domestic market, growth was driven by LCCs such as Thai Air Asia, Nok Air, Thai Lion Air, and Thai Vietjet. On an international level, Asian LCCs such as Spring Airlines from China, Scoot, Air Asia, and Lion Air drove growth.

The global pandemic had an above-average impact on Thailand, reducing traffic by 85% and reducing international traffic to nearly zero. In the post-pandemic years, air traffic recovery in Thailand lagged behind other countries. While Europe had already reached 95% of 2019 levels last year, Latin America was level, and North America moved ahead, Thailand was still 26% below its 2019 traffic volume. This was also behind the Asia average of -14%.

Thailand saw an improvement in the first quarter of this year to 17% below the 2019 level. This was mainly attributed to international passenger recovery. The international rebound is closer to the overall March traffic levels across Asia, which stood at 13% below pre-pandemic, according to traffic data from the Association of Asia Pacific Airlines.

The most important reason for the slower recovery is the fact that the vast majority of international travelers at the Thai airports were Chinese, making up a quarter of the total (see chart below)—and they are not returning quickly just yet. Thai outbound and other Asian inbound tourism make up another significant share while the U.S. and European tourists (the markets with the fastest recovery) account for a relatively low share.

Investment for Expected Recovery

Nevertheless, the overall prospects for Thai aviation are bright, with airline expansion plans, favorable government policies for the sector, easing inflation pressures, and continued growth of the middle class in Asia.

These trends are expected to support tourism growth going forward, and ongoing and planned airport projects in the country suggest there is confidence in the market.

Bangkok Suvarnabhumi (BKK)

After the satellite opened last year, marking the completion of phase 2 at BKK, further expansions are planned. These include an east and west wing to the main terminal by 2027, providing additional capacity for 15 million passengers. A north expansion with a new terminal complex for an additional 30 million annual passengers is still mentioned in the investor presentation for construction in 2028.

Bangkok Don Mueang (DMK)

Phase 2 and 3 at Bangkok’s second airport will increase capacity to 50 million passengers by 2029. These phases include the construction of a new international passenger terminal and the renovation of passenger building 1.

Pattaya U-Tapao (UTP)

Situated 150km south of Bangkok, UTP has initiated the construction for a first phase expansion with a capacity of nearly 16 million passengers to be operational by the end of 2026. Further development includes expansion to 30 million capacity by 2030, and an ultimate long-term capacity of 60 million passengers.

Phuket (HKT)

A six million passenger capacity expansion at HKT is planned by 2029 by expanding the international terminal.

Chiang Mai (CNX)

Capacity at CNX will increase from eight to 16.5 million passengers through the construction of a new terminal by 2029. Capacity will be further increased to 20 million passengers by 2033.

Greenfield Airports

Two new greenfield airports are currently being assessed, with feasibility studies due later this year and a construction start in 2027. These are Andaman Airport in the south and Lanna Airport in the north. Land acquisition processes are already underway for the airport in Andaman. Airports of Thailand, the developer, has said that private investment partners would be part of the projects.