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Aircraft Maintenance – 2010 Updated

THAILAND: EXCELLENT AIRCRAFT SERVICE AND MAINTENANCE HUB

October 2012

 

Aviation activity in Thailand has grown rapidly over past decades. Thailand’s popularity as an international tourist and even medical tourist destination has kept the sky filled with aircraft from every corner of the globe. The country has become a regional service and maintenance center for refueling, repairing, maintaining and refitting aircraft. As a result, Thailand is now a major player in the aircraft maintenance industry. 

 

Air passenger movement in Thailand has been growing at an average annual rate of 4.4%. Suvarnabhumi, one of the major aviation facilities in the country, is the sixth busiest airport in Asia, handling 47.8 million passengers in 2011. It is also ranked 20th in the world for cargo traffic. According to The Boeing Company, over coming years the Asia-Pacific region will enjoy the world’s highest rate of growth in passenger air travel. As cargo and passenger volumes continue to accelerate, investment opportunities in the Thai aircraft maintenance industry will likewise become more lucrative.

 

Major Thai airlines include Thai Airways International, Bangkok Airways, Thai AirAsia, Nok Airlines and Orient Thai Airways. More than half of the aviation activity in Thailand is undertaken by these five airlines.

 

Thailand’s Aircraft Traffic in 2011*

Airport

Total Movement

% Change

Passenger

Aircraft Movement

Freight (Ton)

Passenger

Aircraft Movement

Freight (Ton)

Suvarnabhumi

47,800,585

288,540

1,359,166

12.48

10.22

3.91

Don Mueang

3,972,876

47,508

7,175

44.01

41.38

5.79

Chiang Mai

3,680,390

30,800

20,187

15.63

12.32

-0.39

Chiang Rai

805,842

5,804

3,775

11.27

1.58

40.75

Hat Yai

1,834,568

13,678

14,503

25.23

23.05

9.28

Phuket

8,206,405

55,110

29,764

20.73

19.46

3.74

Note: *Fiscal year 2011 (Oct 2010-Sep 2011)

Source: Airports of Thailand

 

 

Suvarnabhumi International Airport has significantly boosted the growth potential of the aerospace industry in the Kingdom with a capacity to service 45 million passengers per year, 3 million tons of cargo and 76 flights per hour. Since Suvarnabhumi exceeded its annual capacity with 48 million passengers in 2011, it has planned further development to accommodate the increasing number of passengers. Development will enable annual support of 80 million passengers until 2019.

Don Mueang International Airport has reopened for both domestic and international flights. At present, Don Mueang serves general aviation, state aircraft, military aircraft, government aircraft and pure charter flights. In 2011, Don Mueang served 47,500 flights, 7,000 tons of cargo and almost 4 million passengers.

Chiang Mai International Airport is the major gateway to northern Thailand. In 2011, it handled almost 4 million passengers, 20,000 tons of cargo and 30,800 flights.

 

Mae Fah Luang-Chiang Rai International Airport is located in Chiang Rai Province in northern Thailand. In 2011, it served almost 6,000 flights, more than 800,000 passengers and nearly 4,000 tons of cargo.

 

Hat Yai International Airport in southern Thailand in 2011 served almost 13,700 flights, 14,500 tons of cargo and 1.8 million passengers. 

 

Phuket International Airport is the second-busiest airport in Thailand. Passengers in 2011 numbered around 8 million, with 30,000 tons of cargo and 55,000 flights.

 

 

Thailand’s Imports, Exports of Aircraft Parts and Components in 2011

HS Code

Description

Imports

(US$ million)

Exports

(US$ million)

88

Aircraft, spacecraft and parts

1,744.78

1,432.98

854430

Ignition wiring sets, other wiring sets for vehicles and aircraft

118.53

437.84

700721

Laminated safety glass for vehicles and aircraft

10.33

33.55

401130

Pneumatic tires of rubber for aircraft

9.82

79.59

840710

Aircraft engines

3.38

7.89

840910

Parts for spark-ignition-type aircraft engines

2.3

28.12

401213

Retreaded pneumatic tires of rubber, used on aircraft

0.42

16.68

940110

Seats for aircraft

5.89

0.11

Source: United Nations Trade Map

 

 

Aircraft, spacecraft and parts (HS code 88) is Thailand’s largest aircraft import sector, with inbound shipments valued at US$1.7 billion in 2011, a 400% increase from the previous year. Major import markets of the category are France (39%), Sweden (26%) and the United States (18%).

 

To spur further development of the local industry, the Board of Investment (BOI) grants investment benefits to projects in the repair of aircraft and aviation parts. Such measures are already attracting major new investments. Rolls-Royce, one of the world’s top aviation suppliers, recently made plans to expand its production of aerospace parts to Thailand.

 

EXCELLENT AEROSPACE MAINENANCE, REPAIR & OVERHAUL CENTER

 

Situated at the heart of Asia, Thailand is gearing up to become a full-service hub and major player in the region’s multibillion-dollar aircraft maintenance industry. The country has the infrastructure in place for repair services, including the overhaul of aircraft engines, and is already a major hub for the electronics and electrical appliances (E&E) industry, which opens opportunities for cluster development of avionics and communications equipment. Price, quality and service define Thailand’s E&E industry. And with the addition of Ducommun Technologies’ manufacture of high-performance commercial microwave switches, the benefits to aircraft maintenance have become even greater.

 

Aerospace maintenance, repair and overhaul (MRO) companies and organizations in Thailand include Thai Airways International, Thai Aviation Industries, Triumph Aviation Services Asia, and Scandinavian Aircraft Maintenance Co., Ltd.

 

The THAI technical department of Thai Airways International is one of the leading maintenance centers in Asia, with more than 45 years of experience. It has received the “Requalifier Identification Certificate” from the U.S. Department of Transportation, signifying top quality for aircraft emergency equipment maintenance processes.

 

THAI has three maintenance centers in the country. Its Suvarnabhumi center covers 190,400 m2, including a 24,300 m2 hangar, the largest hangar in Southeast Asia. It can simultaneously accommodate three extra-wide-body aircraft such as the Airbus A380. Capabilities include technical support, landing gear changes, a wheel and brake workshop, a sheet metal workshop, a painting shop, an NDT shop, a welding shop, a tools and equipment repair shop, a GSE workshop, and A-Check and C-Check for A380 and MCC to handle all problem of line maintenance.

 

The facility at Don Mueang has almost 50 years of experience with structural, hydro-mechanical, engine, instrument, radio, electronics and avionics overhaul for the Airbus A300-600, A310 and A330 and Boeing B737, B747, B777 series. The center at the U-Tapao air base offers heavy maintenance services for both C-Check and D-Check on three aircraft simultaneously.

 

Many other aviation companies are benefitting from growth in the country’s aviation industry. Among these are Weston, Primus, Driessen, Aeronautical Radio of Thailand, and Airports of Thailand Plc (AOT).

 

Corporatized from a state enterprise into a public limited company in 2002, AOT is a leader of Thailand’s airport operations. Its main business lines are managing, operating and developing airports. AOT has strong experience in airport development planning to meet international standards. Currently, six international airports are under its administration: Suvarnabhumi, Don Mueang, Chiang Mai, Chiang Rai, Hat Yai and Phuket.

 

WHY THAILAND

 

Thailand offers many advantages for MRO of aircraft and components. These include:

 

Competitive skilled workforce supply

Currently, over 200,000 people are employed in Thailand’s aviation sector. Indeed, the well-qualified but affordable workforce is a considerable attraction for many investors.

 

“We chose Thailand to set up our first production facility outside the U.S. because of the quality of its workforce, favorable laws and central location in Southeast Asia.”

 

-Joseph C. Berenato, Chairman and CEO, Ducommun Inc.-

 

Over 60 public and private engineering institutes across the country are accredited by the Council of Engineers, offering 20,000 engineering graduates each year. Moreover, there are many curriculums in aerospace engineering and technology at universities in Thailand.

 

Strong Business Climate

Thailand’s economy is one of the fastest-growing in Asia. The World Bank in 2012 ranked Thailand as the world’s 18th easiest country in which to do business.

 

Excellent Infrastructure and Logistic Systems

Thailand has an advantageous geographical location in Southeast Asia, as a convenient route through the east-west and north-south corridors that makes it easy to access all nearby countries, including Laos, Cambodia, Vietnam, Myanmar, Malaysia and Singapore.  Thailand provides a world-class infrastructure, including its international airports, the Laem Chabang deep-sea port, extensive road networks and rail links, and modern communication facilities.

 

Trade Liberalization

Thailand, as a signatory to free trade agreements with various countries such as Australia, New Zealand, India, Japan and members of the Association of Southeast Asian Nations (ASEAN), extends trade opportunities into many parts of the globe. Furthermore, the establishment of the ASEAN Economic Community (AEC) in 2015 will expand reach to the 10 member states of ASEAN that collectively comprise a market of 600 million consumers.

 

The AEC will serve as a massive single market that is fully integrated into the global economy. The AEC will open new doors to manufacturers by transforming ASEAN into a region with the free movement of goods, capital, services, investment and workforce.

 

ATTRACTIVE INVESTMENT INCENTIVES

 

The BOI offers a wide range of fiscal and non-tax incentives for investments. Tax-based incentives include exemption or reduction of import duties on machinery and raw materials, and corporate income tax exemptions and reductions. Non-tax incentives include permission to bring in foreign workers, own land and take or remit foreign currency abroad. Additionally, foreign businesses are entitled to 100% ownership. 

 

 “The incentives were one of the main reasons why Primus chose Thailand to expand production in Asia. The BOI was very supportive throughout our planning and the process to get our license approved.”

 

- Douglas P. Fletcher, CFO of Primus International Bangkok-

 

As part of the BOI’s policy to promote sustainable development, investments in the manufacture, repair or modification of aircraft, including aircraft parts and equipment or onboard equipment, are eligible for maximum incentives.

 

FOR FURTHER INFORMATION:

 

Thailand Board of Investment:  www.boi.go.th

Department of Civil Aviation: www.aviation.go.th

Aeronautical Radio of Thailand (AEROTHAI): www.aerothai.co.th

Airport of Thailand Pcl: www.airportthai.co.th