A major review of Thailand’s Passenger Service Charge (PSC) is underway, with officials signaling a decision could come by October. If a substantial adjustment is approved, Airports of Thailand (AoT) stands to gain significantly in annual revenue, potentially reshaping the funding landscape for airport development and related infrastructure. The Civil Aviation Authority of Thailand (CAAT) and AoT are jointly examining how the PSC for outbound travelers should be structured going forward, aiming to align charges with actual operating costs and investment needs. This exploration comes after years of the PSC remaining largely unchanged, a situation that supporters say has become a bottleneck for expanding and upgrading Thai airports. The inquiry is being conducted in the context of international comparisons and evolving expectations for Thailand’s role in regional air travel.
Context and Rationale for Revisiting the PSC
The PSC is a fee levied on passengers to help cover the costs of airport services and facilities. In recent years, CAAT has underscored that the rate has not kept pace with the rising cost of operating airports and implementing infrastructure projects. This gap has been identified as a barrier to timely and meaningful airport development, limiting AoT’s ability to invest in modern facilities, technology, and capacity enhancements that are necessary to support growing passenger volumes and more complex air travel patterns. Comparisons to regional hubs highlight the magnitude of the disparity: Singapore’s Changi Airport, for example, collects an amount per passenger in the region of 1,400–1,500 baht, whereas AoT’s current international departures PSC sits at 730 baht. This gap has been cited by officials as undermining competitiveness in attracting and sustaining international traffic flows and investment.
The push for a major adjustment is anchored in the objective of ensuring that the PSC reflects realistic revenue expectations and the investment required to maintain and upgrade airport infrastructure. If AoT intends to elevate Thailand’s status toward becoming a regional aviation hub, the PSC must be calibrated so that revenue aligns with the cost of delivering high-quality airport services and supporting long-term infrastructure expansion. By aligning PSC levels with actual operating costs and future investment plans, the authorities seek to create a sustainable funding mechanism that can underwrite planned improvements while maintaining reasonable charges for passengers. The underlying premise is that charges should be predictable, justifiable, and capable of supporting a modern, efficient, and safe airport system across the AoT network.
In this context, CAAT and AoT are conducting a joint study focused on outbound travelers to assess whether a substantial adjustment is warranted. The study’s aim is to determine the most appropriate PSC level that can deliver the needed revenue without prohibiting travel or unduly burdening passengers. Although it remains uncertain whether a proposed 100-baht increase will be part of the final package, the joint study has been framed as a comprehensive evaluation of the costs and benefits of various PSC scenarios. The overarching goal is to determine an optimal path that balances revenue generation with affordability for travelers and competitiveness with international peers. The collaboration between CAAT and AoT is expected to produce a formal proposal that will be submitted to CAAT for review, followed by a presentation of the findings to the Civil Aviation Board (CAB) for final decision-making.
The province of the discussion is not limited to the outbound PSC alone. In parallel, CAAT has signaled an interim plan to propose a five-baht-per-person PSC increase to the CAB. This incremental adjustment has already undergone internal evaluation by CAAT but awaits CAB approval, which has experienced delays due to a quorum issue arising from a member’s resignation. The transport minister, who chairs the CAB, is anticipated to nominate a new member to the cabinet soon, a move that is expected to enable the CAB to convene and deliberate on the interim proposal. The interplay between strategic policy direction and governance processes is a key aspect of the current timeline, underscoring the importance of timely and transparent decision-making in the PSC reform process.
An additional dimension in this policy discussion concerns the AoT’s exploration of new charge categories, notably charges for transit passengers (those who continue on the same flight after a layover) and transfer passengers (those who switch flights or aircraft after a layover). These charges are presently exempt from the PSC framework, but CAAT has confirmed its readiness to consider introducing such charges, should AoT present robust documentation. Any proposal to extend charges to transit and transfer passengers would require detailed documentation and comparative data demonstrating alignment with practices at comparable international airports. This element of the reform signals the potential expansion of PSC revenue sources beyond outbound international travelers and raises questions about the complexity of administering a more granular charging scheme across six airports.
In parallel, the AoT’s leadership has sought to emphasize the alignment of policy objectives between AoT and CAAT. Acting AoT president Paweena Jariyathitipong has stated that both agencies are now aligned in principle: the PSC must cover the actual costs of providing airport services. This stance reflects a long-standing advocacy by AoT over the past five to six years, underscoring a shared view that the PSC should be cost-recovering and sufficient to fund ongoing operations, maintenance, and future investments. The alignment signals a cohesive policy trajectory, even as the precise level and structure of the PSC remain under study and subject to approval by the CAB.
The Process and Timeline: From Study to CAB Consideration
World-class aviation governance typically involves a sequence of studies, proposals, consultations, and approvals, and the Thai PSC reform process is no exception. The immediate objective is to finalize the joint CAAT-AoT study by October, after which AoT is expected to submit its formal proposal to CAAT for review. The next step involves CAAT inviting AoT to present the findings, including a justification of the necessity for the adjustment and the associated investment plans. Following this presentation, CAAT will determine an appropriate PSC adjustment and forward the proposal to the Civil Aviation Board (CAB) for final approval. The procedural steps reflect a system of checks and balances intended to ensure that any PSC changes are technically sound, financially viable, and aligned with national aviation policy.
In the interim, the CAAT has advanced an incremental approach by proposing a five-baht-per-person PSC increase to the CAB. This proposal has already undergone budgetary and technical evaluation within CAAT, but it requires formal CAB approval. The delay in CAB action has been linked to governance issues, specifically an incomplete quorum caused by a member’s resignation. The transport minister’s anticipated occurrence of a new nomination to the cabinet is viewed as a prerequisite to reconstituting the CAB’s quorum and enabling timely deliberations on the interim measure. The governance dimension is therefore essential to maintaining momentum in the PSC reform process and ensuring that interim adjustments can be implemented without compromising longer-term policy objectives.
The procedural pathway from the joint study to CAB approval is designed to ensure due diligence at every stage. The CAB’s role includes reviewing the rationale for any adjustment, evaluating the sufficiency of investment plans that accompany the PSC proposal, and assessing whether the proposed charges are equitable, transparent, and consistent with international norms and ICAO standards. After CAB approval, the formal process would move toward formal adoption of the revised PSC regime and the implementation of the new rates or structures across AoT facilities. The emphasis on a transparent process and robust data supports a policy environment in which stakeholders can understand the basis for charges and the expected outcomes in terms of airport operations and passenger experience.
Transit and Transfer Charges: Expanding the Scope of PSC
A notable element of AoT’s contemplated policy moves is the consideration of introducing charges for transit and transfer passengers, who currently enjoy PSC exemptions. The rationale for expanding the scope of the PSC to cover certain transit and transfer scenarios lies in the belief that airport services are consumed by all passengers who pass through the facilities, even if they do not originate or terminate their journey in Thailand. CAAT has signaled its willingness to consider such a proposal, provided AoT submits comprehensive documentation and comparative data with similar-tier international airports. The success of this proposal would likely depend on the ability to demonstrate that different categories of passengers impose comparable costs on airports and that the pricing structure is administratively feasible across the AoT network.
From a cost-recovery perspective, the expansion of PSC coverage to transit and transfer passengers would align with the broader objective of ensuring that the fees reflect the actual usage of airport services. This would potentially improve revenue stability and enable more predictable funding for infrastructure renewal and capacity expansion. However, the additional complexity of charging transit and transfer passengers could introduce operational challenges and require careful design to avoid complicating passenger experiences. The policy design would need to consider exemptions, thresholds, and the administrative burden associated with categorizing passengers by their travel patterns, as well as harmonizing with international norms to maintain competitiveness in the regional aviation market.
The AoT has indicated that it will need to submit detailed documentation demonstrating the cost drivers associated with transit and transfer passengers, along with comparative analyses of practices at peer airports. The CAAT’s readiness to evaluate such a proposal indicates a willingness to consider a broader PSC framework that more accurately reflects the true cost of providing airport services. The outcome of this deliberation could influence the overall level and structure of the PSC, particularly if a wider base of beneficiaries is identified as contributing to the costs of airport operation and development.
Aligning Costs with Services: CAAT-AoT Collaboration and ICAO Frameworks
A central tenet of the PSC reform discussion is that the charges should cover the actual costs of providing airport services. This principle has been a consistent position of AoT over several years, and CAAT has indicated agreement in principle on this objective. The emphasis on cost recovery underlines a broader philosophy that airport charges should be directly linked to the services enjoyed by passengers, airlines, and other airport users. While the specific PSC level remains to be determined, the concept of cost-reflective pricing remains a guiding beacon for both agencies.
In formulating the PSC, authorities acknowledge that cost figures and charging methodologies vary across countries. Nevertheless, international normative standards largely converge around a framework established by the International Civil Aviation Organization (ICAO). ICAO standards provide a basis for comparing charging models and ensuring consistency with global best practices. AoT is currently evaluating which PSC model best suits the Thai context, taking into account local operational nuances, traffic patterns, and airport management realities. Although AoT oversees six airports with varying scales of traffic and different cost structures, there is an intention to apply a uniform PSC rate across all facilities to ensure consistency in revenue and expense management. This approach aims to simplify administration, promote fairness, and reduce potential distortions that could arise from a piecemeal pricing strategy across separate airports.
The process also contemplates how Thailand’s PSC model will align with ICAO standards while accommodating domestic specifics. The balancing act involves aligning best practices with national priorities, including the ability to finance ongoing operations and future capital projects, and ensuring that the pricing structure does not unduly burden air travelers or degrade the passenger experience. The ICAO framework typically allows for a variety of cost-recovery approaches, and AoT’s task is to select a model that best matches Thailand’s particular mix of airport services, cost drivers, and revenue needs, while preserving transparency and predictability in pricing for airlines and passengers alike. This strategic alignment is intended to ensure that Thailand’s PSC regime remains credible, defendable, and financially sustainable in the face of evolving aviation dynamics.
Across Six Airports: Uniform PSC Rate and Revenue Implications
AoT’s plan to apply a uniform PSC rate across all six airports is driven by a desire for consistency in revenue and expense management. Differences in management costs and passenger volumes among the six facilities present a challenge to a one-size-fits-all approach; however, supporters argue that a standardized rate can reduce administrative complexity, improve predictability for airlines, and simplify budgeting and forecasting for AoT. The uniform approach would mean that, regardless of the airport, the PSC would be calculated using a common framework. While operational realities differ from airport to airport, a uniform rate can help align the cost base with revenue expectations, balancing efficiency with fairness across the AoT network.
From a financial perspective, the adoption of a uniform rate carries implications for AoT’s annual revenue. If the conservative scenario of a five-baht-per-person increase is approved, AoT could secure an additional 200 million to 300 million baht per year, a modest uplift that supports ongoing operations and incremental investments. In a more ambitious scenario—an increase of up to 100 baht—the potential uplift in annual revenue could reach about three billion baht. These projections illustrate how even relatively modest adjustments can yield substantial annual revenue for the maintenance and development of airport infrastructure, potentially enabling faster modernization and capacity enhancements. The revenue impact also depends on passenger growth, airline traffic, and the overall utilization of airport services, all of which are dynamic factors that policymakers must weigh when determining the final PSC structure.
The idea of a uniform PSC rate also intersects with broader strategic goals, including Thailand’s ambition to position AoT as a regional hub. Achieving this status likely requires sustained investment in modern facilities, technology-driven services, and efficient operations that can attract international carriers and high-yield traffic. A cost-reflective, uniform PSC regime could support these investments by providing a stable and predictable funding stream. Yet any pricing decision must consider public and industry sentiment, competitiveness with neighboring hubs, and the potential impact on travel demand. The authorities thus face the task of balancing revenue sufficiency with traveler affordability and aviation competitiveness in a rapidly evolving market.
Interim Measures, Governance, and Legislative Pathways
As the joint study progresses toward a final recommendation, interim measures such as the five-baht-per-person PSC increase offer a pragmatic step to begin capturing more revenue while longer-term reforms are developed. This interim adjustment has the potential to provide immediate funds to AoT and help bridge the gap until the full PSC framework is approved. However, any interim change must pass through the CAB, which requires a functioning quorum and formal approval processes. The governance dynamics—especially the need to replace a board member who resigned—play a pivotal role in maintaining momentum for reform and ensuring that interim measures are implemented in a timely and transparent manner.
In addition to the interim revenue step, the reform process involves a detailed submission of the proposed PSC structure by AoT after the joint study’s completion. CAAT’s role is to review this proposal, assess its alignment with international standards and national strategic objectives, and determine whether the proposed charges are appropriate given the incurred costs and the planned investments. The CAB acts as the final arbiter, weighing all technical, financial, and policy considerations before granting approval. The sequence of events—from study completion to submission, CAB review, and final approval—requires a coordinated effort among agencies, the cabinet, and AoT to ensure a smooth transition to a revised PSC regime.
The governance framework emphasizes accountability and transparency. The need for a quorum on the CAB highlights how structural and personnel changes can influence policy timelines. As policymakers seek to implement changes, the transition planning includes clear communication with stakeholders, attention to passenger impact, and careful phasing of any rate changes to minimize disruption. The governance architecture is designed to reduce uncertainty for airlines, airports, and passengers, while enabling the government to deliver essential airport infrastructure and service improvements in a financeable manner.
Revenue Scenarios: From Five to One Hundred Baht Increases
The potential revenue impact of PSC changes hinges on the final rate adjustments and the number of passengers affected. A five-baht-per-person increase, if approved, would generate an additional 200 million to 300 million baht per year for AoT, a meaningful but moderate uplift that can support incremental improvements in airport services and facilities. In the event that the PSC increase reaches as high as 100 baht per passenger, AoT could see an annual revenue boost of approximately three billion baht. These figures illustrate how differently sized adjustments can translate into large-scale funding for infrastructure investments and ongoing operational needs.
The revenue implications are complicated by factors such as passenger growth, changes in aviation demand, and the distribution of charges across international and domestic travelers. If the uniform PSC rate is applied across all six AoT airports, the incremental revenue would reflect aggregate passenger movements and the cost structures at each site. The government and AoT must also consider external factors such as regional competition, airline pricing strategies, and passenger sensitivity to price changes, all of which can influence the net impact on travel demand and revenue. The final decision will attempt to balance the need for revenue generation with the goal of maintaining Thailand’s attractiveness as a travel destination and aviation hub.
The strategic logic for potential bigger increases—such as a 100-baht rise—relies on a clear justification that the added revenue will be directed toward necessary, value-enhancing investments that improve passenger experience, safety, efficiency, and capacity. The policy design would need to demonstrate how the additional funds will translate into tangible improvements, such as upgraded terminal facilities, enhanced baggage handling, better passenger processing technology, and more robust security and safety measures. The ultimate objective is to ensure that the PSC remains a credible mechanism for financing airport services in a way that supports a higher level of service and broader national aviation ambitions.
Economic and Strategic Implications for Thailand’s Aviation Sector
The PSC reform must balance several competing considerations: revenue sufficiency for airport modernization, passenger affordability, airline costs, and Thailand’s competitiveness in the regional aviation landscape. The ongoing discussion reflects a broader strategy to elevate AoT’s role, capacity, and service quality in support of economic growth and tourism. A cost-reflective PSC can provide a stable funding base for ongoing operations, maintenance, and expansions, reducing reliance on ad hoc government subsidies and ensuring that costs are distributed in a transparent and predictable manner.
As the aviation market evolves, Thai authorities will be watching how PSC adjustments interact with passenger demand, airline capacity, and the overall health of the travel sector. Differentiating between international and domestic passenger charges, and considering transitional arrangements for travelers with layovers, can influence how attractive Thailand remains as a hub for regional and long-haul travel. The pricing structure must take into account the potential effects on routes, traffic flows, and the ability of Thai airports to compete with peers across Southeast Asia and beyond. These considerations require careful modeling, stakeholder consultations, and ongoing monitoring to adjust policies as needed in response to market dynamics.
In parallel, the move toward a uniform PSC across the AoT network can contribute to governance simplicity and consistent service standards across all six airports. It can reduce the complexity of pricing for airlines, travel agents, and passengers, while reinforcing the credibility of the cost-recovery framework. The alignment with ICAO standards is a crucial element of this approach, ensuring that Thailand remains aligned with global practices while still tailoring the framework to national conditions. This alignment supports a forward-looking aviation strategy that seeks to strengthen Thailand’s market position, attract investments, and deliver high-quality travel experiences for passengers.
Practical Considerations for Implementation
Implementing a revised PSC regime involves practical considerations that extend beyond policy design. Administrative systems must be capable of applying the charges accurately across flights, passenger categories, and airport facilities. IT infrastructure, billing processes, and auditing mechanisms must be prepared to handle any new or expanded charge structure, including any transit or transfer passenger components. The administrative burden should be weighed against the expected revenue gains and the anticipated improvements to airport services. A successful rollout will require clear communication with stakeholders, including airlines, airports, travel agents, and passengers, to ensure that changes are understood and accepted.
The transition plan must also address potential operational disruptions during the changeover. Airlines may need time to adjust pricing, schedule configurations, and fee settlement processes. Passengers should receive advance information about any changes and the reasons behind them, emphasizing how the revenue supports better airport facilities and safer, more efficient services. A proactive public communications strategy can help manage expectations and minimize confusion, ensuring that the policy change is implemented smoothly and with broad understanding of its benefits.
From a governance perspective, maintaining an open and transparent process is essential. The CAB’s final approval will signal formal adoption, after which AoT will implement the revised PSC framework. The interim five-baht increase, if approved, will serve as a bridge to the longer-term plan, enabling early revenue benefits while the full framework is refined and implemented. Such phased approaches are common in complex policy reforms where the objective is to balance immediacy with thorough evaluation and stakeholder input.
Contextual Benchmark: Regional Comparisons and Global Norms
Thailand’s PSC reform is being considered within a regional and global context. The comparison with Singapore’s Changi Airport underscores the scale of the adjustments some markets consider when aligning charges with the cost of airport services and investments. While numerous factors influence PSC levels—cost structures, service levels, passenger mix, and investment plans—there is a shared objective across many jurisdictions: ensure that airport charges fairly reflect the true cost of providing services while supporting ongoing modernization and expansion.
ICAO standards provide the framework within which different countries design and compare their charging regimes. IAOC guidelines emphasize consistency, transparency, and cost-reflective pricing, encouraging governments to consider passenger and airline impacts, economic efficiency, and long-term sustainability. Thailand’s effort to adopt a uniform PSC at AoT airports and to explore the expansion of charge categories reflects an intent to align with international best practices while addressing unique national priorities, such as tourism-driven growth and regional connectivity. The outcome of this alignment will influence how Thailand competes as a regional aviation hub and how it finances the continuous improvement of its airport network.
Infrastructure Financing and Development Trajectories
A core objective of revising the PSC is to secure funding for infrastructure development and upgrading across AoT’s six airports. The revenue generated through a cost-reflective PSC can be directed toward modernization initiatives, terminal enhancements, airside and landside improvements, and technology upgrades that streamline passenger processing and security. The potential uplift in annual revenue—from several hundred million baht to several billion baht depending on the final rate—would provide a more robust financing base for capital projects and ongoing maintenance. By ensuring that charges align with actual service costs and investment needs, AoT can plan more effectively for long-term improvements, reducing funding gaps and enabling a more proactive approach to capacity expansion and service quality.
The funding implications extend beyond the physical facilities themselves. Improved infrastructure can lead to better passenger experiences, more efficient operations, and increased reliability, all of which influence airline schedules, route viability, and overall travel demand. A stronger, better-funded airport system can serve as a catalyst for economic growth, tourism, international trade, and regional integration. In this sense, PSC reform is not merely a pricing adjustment but a strategic instrument for advancing Thailand’s broader economic and development goals, positioning AoT to better support national priorities and respond to evolving aviation market dynamics.
Risks, Challenges, and Policy Considerations
As with any major policy shift, PSC reform entails risks and potential challenges. A key concern is ensuring that price adjustments do not unduly deter travel or create competitiveness gaps with neighboring aviation hubs. Policymakers must assess how changes influence passenger demand, airline pricing strategies, and overall traffic volumes. The design of any transit and transfer charges would also require careful consideration to avoid unintended consequences that could affect connecting travelers or international itineraries. The ultimate objective is to deliver a cost-recovering framework that is fair, transparent, and aligned with Thailand’s strategic goals without compromising the country’s appeal as a travel destination.
Governance and administrative capacity are also critical. Quorum issues on the CAB and the timely appointment of board members can affect the pace of reform. The process must balance thorough review with timely decision-making to implement improvements that deliver tangible benefits. Stakeholder engagement will be essential, ensuring that airlines, airports, and passengers have opportunities to understand, scrutinize, and contribute to the policy design. Clear, consistent communications about how the revised PSC will be structured and how revenue will be allocated can help build trust and support for the changes.
In sum, the PSC reform represents a comprehensive effort to align Thailand’s airport charges with actual costs and investment needs, while maintaining fairness and competitiveness. The joint CAAT-AoT study, interim measures, and potential expansion of charge coverage all contribute to a nuanced policy approach that seeks to balance revenue generation with passenger experience, financial sustainability, and Thailand’s aspirations as a regional aviation hub. The final outcomes will depend on rigorous analysis, governance effectiveness, and the ability to translate policy into practical, transparent, and economically sensible implementation.
Conclusion
Thailand’s Civil Aviation Authority and Airports of Thailand are pursuing a strategic PSC reform that could reshape how airport services are funded and how much passengers pay to use AoT facilities. By exploring a major PSC adjustment, including the possibility of a 100-baht increase and the potential extension of charges to transit and transfer passengers, CAAT and AoT are aiming to align PSC levels with actual costs and investment needs, while ensuring consistency with ICAO standards and regional competitiveness. The process hinges on a joint study due by October, followed by a formal proposal to CAAT and then review by the Civil Aviation Board for final approval. An interim five-baht-per-person increase has been proposed as a transitional step, pending CAB approval, during a period in which governance and quorum considerations must be resolved. The prospect of applying a uniform PSC across AoT’s six airports is part of a broader strategy to simplify pricing and strengthen revenue management, supporting infrastructure development and service enhancements across the entire AoT network. While challenges remain—including balancing passenger affordability, airline costs, and international competitiveness—the reform represents a deliberate effort to modernize airport funding and advance Thailand’s ambition to become a leading regional aviation hub.
