Thursday, June 1, 2017

 http://www.straitstimes.com/asia/se-asia/thailands-aviation-hub-bid-comes-with-challenges

Thailand's aviation hub bid comes with challenges

Staff at U-Tapao airport last year. Under a $7.9 billion plan, the airport - located 140km south-east of Bangkok - will be transformed into a major maintenance, repair and overhaul centre by 2026.
Staff at U-Tapao airport last year. Under a $7.9 billion plan, the airport - located 140km south-east of Bangkok - will be transformed into a major maintenance, repair and overhaul centre by 2026.

They include cutting red tape, building infrastructure and political stability

Thailand will have to do much more than just revamp an old civil-military airport if it aims to challenge Singapore's regional dominance in aerospace maintenance, repair and overhaul (MRO), say industry executives here.
They said while Thailand has an edge over Singapore in terms of location, availability of land and cheap labour, there are other bigger challenges to overcome.
They include building the necessary infrastructure, cutting down on red tape and providing a conducive political environment to encourage new foreign investments.
Under a US$5.7 billion (S$7.9 billion) plan, U-Tapao airport, located 140km south-east of Bangkok, will be transformed into a major MRO centre by 2026. The Thai government believes U-Tapao can provide an alternative to Singapore, which is "at capacity" already.

"This plan requires big investments and Thailand's bureaucracy can be very slow," said Mr Bowrn Chunsaereechai, general manager of Ducommun Technologies, which serves the aerospace and defence industries. Mr Bowrn added the system is not "perfectly clean" and may be susceptible to corruption.
He also said the government needs to review the law on foreign ownership and come up with clearer policies, as political instability in the past decade has created uncertainty for new investors.
The Board of Investment (BOI) said that Prime Minister Prayut Chan-o-cha has already issued an order under Article 44, which grants the junta absolute powers, to ease limitation on foreign ownership in aviation maintenance centres but did not indicate to what extent. The government earlier said it would allow foreigners to own more than 50 per cent of shares in MRO businesses.
BOI's deputy secretary-general, Mr Ajarin Pattanapanchai, was in the United States recently to woo investors to the 15-year aviation development plan under the Thailand 4.0 economic model. The ambitious undertaking aims to create a 10 billion baht (S$406 million) industry and jobs for 7,500 workers.
Ms Ajarin said the region needs to catch up with new demand from Myanmar, Vietnam and Cambodia.
Mr Peter Gille, vice-president and general manager of Turbine- Aero, said Thailand can take advantage of this growth in neighbouring markets since it is more centrally located in South-east Asia compared with Singapore.
"The infrastructure is already there," Mr Gille told The Straits Times. He said big players in the aerospace MRO industry such as Triumph Group, Chromalloy, Airbus and TurbineAero are already active in Thailand.
In March, Airbus signed an agreement with Thai Airways International to evaluate the development of MRO facilities at U-Tapao.
"These companies already have the necessary tools, equipment, infrastructure and skills provided by the Thai workforce," Mr Gille said. He added that Thailand has aviation schools offering courses for engineers, technicians and mechanics.
But industry experts said it would take at least a decade to put the necessary infrastructure in place before the kingdom can pose a serious challenge to Singapore.
Compared with Singapore's 37 MRO providers at present, Thailand has only six so far.
"Of course, Singapore is more advanced than Thailand, but we have the advantage of being better located," Mr Bowrn said. "If the government manages to implement the plan, it's possible. Why not?"
A version of this article appeared in the print edition of The Straits Times on May 31, 2017, with the headline 'Thailand's aviation hub bid comes with challenges'. Print Edition | Subscribe

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