Recent years have seen air travel in Thailand experience significant growth, pushing existing infrastructure to its limit. The government is working to address these capacity issues through infrastructure investments, gradually positioning itself as a global aviation hub.
In 2015 Thailand faced concerns about its aviation sector and was downgraded by the US Federal Aviation Administration from Category 1 to 2 for failing to meet international standards in terms of technical expertise, personnel, record-keeping and inspection procedures. While in this category, the country’s services to the US are frozen: no new routes may be added, frequencies cannot be changed and aircraft must remain the same. In the same year, the International Civil Aviation Organisation red-flagged Thailand over safety concerns, though this was lifted in late 2017. In response to the downgrades, the Department of Civil Aviation created the Civil Aviation Authority of Thailand (CAAT) in 2015. Two years later in a demonstration of Thailand’s efforts to regain international acceptance, CAAT suspended 16 airlines after failed safety assessments.
Efforts are under way to improve airport infrastructure. For example, in order to alleviate pressure at Don Mueang International Airport, the authorities increased the number of immigration counters and officers and streamlined entry for Thai citizens. Long-term efforts are focused on increasing capacity and establishing alternative gateways. This includes the BT12bn ($347.4m) project to double capacity and upgrade the existing terminal at Chiang Mai International Airport, as well as the construction of new terminals at Phuket International Airport and Don Mueang. Phayao Province also intends to develop its own airport and has set aside 400 ha to do so. At Suvarnabhumi Airport, Phase II is under way and a Phase III is being discussed. U-Tapao International Airport (UTIA) is planning a second runway and a new terminal building as part of the Eastern Economic Corridor (EEC) development. “Having UTIA fully on-line as an international gateway in six years will certainly help bring more visitors to Thailand and ease congestion at the other airports serving Bangkok and the EEC,” Piya Yodmani, the CEO of Nok Air, told OBG. “By that time, the high-speed trains need to be fully operational.”
With the Asia-Pacific region set to be the fastest-growing market for commercial aviation over the next 20 years, Thailand is seeking to strengthen its aviation infrastructure, particularly its MRO segment, targeting it as a high-value industry with significant growth potential. The demand for MRO services in the region is expected to be driven by the increase in passenger numbers, according to the International Air Transport Association. The association projects an average annual growth of 4.7% through to 2035, taking passenger numbers to 3.1bn, from 1.3bn in 2016, making the Asia-Pacific the largest regional market in the world. The value of Asia’s MRO industry is therefore expected to reach $664bn by 2027.
In June 2018 Airbus signed a memorandum of understanding with Thai Airways to establish a $338m MRO hub at UTIA where expansion works are expected to begin in 2019. The complex will allow for the digital analysis of aircraft maintenance data and will feature specialised repair shops and a training centre. Capable of handling a variety of aircraft, the airport will become the maintenance site for the Airbus A380 in 2018. “The development of UTIA should enable Thailand to create a vibrant and innovative MRO industry,” Pierre Jaffre, president of Asia-Pacific for Airbus Group, told OBG. Thai Airways has projected annual revenue from the facility to average BT3bn ($90.5m) in its first 10 years of operation, rising to BT50bn ($1.5bn) in 50 years.
Overall, increased air travel bodes well for Thailand, as to meet the demand for seats, aircraft numbers operating on Asia-Pacific routes are set to almost triple over the next 20 years from 6000 to 17,000 – an indicator of the potential for regional MRO services.
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