Vietnam Airlines has signed a Memorandum of Understanding (MOU) with ST Aerospace for a component MRO solutions joint venture (JV).
The two firms also have agreed a 14-year component Maintenance-By-the-Hour (MBH) for the airline’s 58 A321ceo and 20 incoming A321neo in component maintenance beginning mid-year. Under the MBH contract, ST Aerospace will set up an inventory base in Vietnam to provide timely services to the airline.
The JV will be based at Noi Bai International Airport and initially will offer pneumatics, hydraulics and electrical components support and will then consider commencement of aerostructure and airframe MRO.
“We are happy that Vietnam Airlines has decided to entrust their A321ceo and A321neo fleets to us for component support, and even more so by the prospect of deepening our partnership with the exploration of a joint venture. The robust development of the economy and a burgeoning middle class have created an ideal environment for the growth of the aviation industry in the Asia Pacific region, and Vietnam’s double-digit growth in the air travel sector is the best reflection of this,” said ST Aerospace president, Lim Serh Ghee.“We are delighted to partner with ST Aerospace to establish a joint venture as well as to provide MRO support for the A321 aircraft family, which is the majority of our fleet. This partnership not only improves our fleet efficiency and world-class service quality, but also represent a major step forward for Vietnam’s aviation industry in general, contributing to the boost of bilateral economic, trade and aviation relations between Vietnam and Singapore,” said Vietnam Airlines EVP, Dang Ngoc Hoa.
Airports in every corner of Thailand will enjoy renovation and expansion as part of efforts to boost travel to secondary provinces
The government's plan to spend more than 38 billion baht to renovate and expand 29 airports nationwide is a big step towards improving infrastructure, boosting air traffic in secondary provinces and strengthening local tourism business.
The investment will also give airlines a chance to expand their networks and let private jet firms extend more options to high-end travellers.
Airports Department director-general Darun Sangchai said the department has held discussions with Thai Airways International (THAI), Nok Air, Thai Lion Air, Thai AirAsia, THAI Smile and Bangkok Airways about airport expansions.
"We will renovate or expand 29 airports over the next 9-10 years under a budget of more than 38 billion baht," Mr Darun said.
The plan is aimed at increasing air travel capacity, enhancing connectivity among secondary provinces and linking small cities with the capital and other major tourist spots in Thailand and Southeast Asia.
The airport expansions are in line with the government's goal of boosting tourism in 55 secondary provinces by offering tax breaks of up to 15,000 baht for tourism spending made during trips to those provinces this year.
While the Tourism Authority of Thailand estimates that the tax campaign could draw at least 10 million visitors to the 55 provinces this year, the Airports Department also expects the scheme to spur use of domestic airports.
Airports that will see expansion include those in Krabi, Khon Kaen, Surat Thani, Ubon Ratchathani and Phitsanulok. Once the expansions are completed, these airports will have the capability to accommodate large aircraft such as the Boeing 747.
Some 29 airports will be improved to serve medium-sized aeroplanes, including in Lampang, Hua Hin and Ranong.
The department is currently expanding Mae Sot airport in Tak province, to be completed in 2019. In the South, Betong airport in Yala is under construction.
Airline operators are upbeat about expanding their networks into secondary provinces and plan to add new links such as Udon Thani-Chiang Mai and Ubon Ratchathani-Phuket, while using U-tapao airport as a new hub to connect with other provinces and overseas destinations.
Some airlines are also mulling whether to add commercial flights to Pattani, Tak and Chumphon provinces, Mr Darun said.
He said the department has encouraged investors to finance a private jet airport not far from Bangkok, perhaps in Nakhon Pathom, to capitalise on the growing high-end market.
Thai AirAsia sees the airport expansions as a great business opportunity. The budget airline vows to operate at all airports and take a lead role in booming domestic tourism.
Tassapon Bijleveld, chief executive of Thai AirAsia, said many provinces can be promoted as new hubs to link with neighbouring countries, especially the CLMV group (Cambodia, Laos, Myanmar, Vietnam).
Thai AirAsia operates at nearly every airport in the country, save for those in Hua Hin, Nakhon Ratchasima and Phetchabun.
Mr Tassapon has advised governments in Southeast Asia to endorse a single visa to attract more visitors.
One of the crucial projects in the government's much-touted Eastern Economic Corridor (EEC) is to pour 236 billion baht over the next five years into developing U-tapao airport and linking it with Suvarnabhumi and Don Mueang airports via high-speed rail. The effort is part of a push to make Thailand an international aviation hub.
The EEC committee also agreed to establish an "eastern aviation city", or Aerotropolis, in the vicinity of U-tapao airport, complementing infrastructure such as motorways, deep-sea ports and the high-speed railway linking the three airports.
Andrew J Wood, president of Skal International Thailand, an association of professionals in the tourism business, said the Aerotropolis project could help Thailand become a regional aerospace hub.
"Thailand's aerospace industry is growing exponentially, with air traffic rising at a rate three times faster than the global market and doubling every 15 years since the early 1980s," Mr Wood said.
The EEC Aeropolis will feature an airport city surrounding U-tapao airport, plus industrial areas, an airline MRO centre (for maintenance, repair and overhaul), and facilities to support the tourism business.
According to Mr Wood, there will be an inner ring road stretching 10 kilometres from U-tapao airport to facilitate the aviation city, and an outer ring road to support logistics activities and connect companies with other transport systems in the EEC provinces of Chon Buri, Chachoengsao and Rayong.
He said the EEC Aerotropolis project will strengthen Thailand's MRO capabilities.
The investment value of the MRO centre is expected to reach US$10.6 billion (349 billion baht) through 2024.
Major aerospace companies already present in Thailand's EEC area include Chromalloy, which supports commercial aviation engine manufacturers, and TurbineAero, which was chosen in February by Boeing to provide aftermarket support in the Asia-Pacific region.
The Board of Investment provided more information on investment opportunities in the aerospace industry and the MRO sector in Thailand at an April trade show in the US.
Chokedee Kaewsang, deputy secretary-general of the Board of Investment, said the passage of the EEC bill is a crucial development for the aerospace sector, which has been drawing strong foreign investment over the past few months.
In February, Rolls-Royce signed an agreement with THAI to offer testbed capacity for the airline, a move that the engine maker described as a crucial building block for its growth in Asean.
That same month, Airbus announced a partnership with Thai Aviation Industries in which Airbus will support all of Thailand's law enforcement and military helicopters for the next two years.
Sikorsky, a Lockheed Martin company, also announced that Thai Aviation Services would serve as its customer support centre.
While infrastructure improvements are under way, the private sector is being urged to brace for digital tourism and the cashless society to keep abreast of market trends.
Kalin Sarasin, chairman of the Thai Chamber of Commerce, said the chamber and business allies have worked for a range of strategies under the Digital Tourism Platform set for launch this year.
The strategies include a downtown VAT refund counter, an Amazing Thai Taste showroom, entertainment ticket, online hotel booking, and online package and optional tour.
The first project, starting in the second quarter, will let foreign tourists claim VAT refunds at counters located in shopping centres such as Siam Paragon, CentralWorld, The Emporium, Central Chidlom and Robinson Sukhumvit. Later it will expand to other tourist destinations such as Phuket, Chiang Mai and Pattaya, Mr Kalin said.
The Amazing Thai Taste showroom will let operators showcase Thai food and use QR code for payment. That project will be launched by the third quarter of this year, along with the entertainment ticket that lets tourists buy entertainment admission online.
The last two projects, online hotel booking and online package and optional tour, are set to go live in the fourth quarter.
Mr Kalin said the Digital Thailand Platform is aimed at providing convenience to tourists during their stay in the country, especially those young travellers who use smartphones and digital devices.
The chamber's statistics show that 87% of tourists coming to Thailand use the internet for surfing information before booking, 64% of them do travel planning online, 43% of them read and study reviews before coming, and 42% purchase tourism services online.
There is work to be done to help tourists enter Thailand more conveniently, Mr Kalin said.
The Thai government earlier revoked the Tor Mor 6 immigration form for Thai people travelling in and out the country. The chamber proposes scrapping the form for foreigners as well.
Chanin Donavanik, head of a working group for Mice (meetings, incentives, conventions, exhibitions) under the public-private collaboration called Pracha Rat, urged the government to speed up development of new tourist attractions.
Remodelling the old capital of Ayutthaya is one task, Mr Chanin said.
"Looking at Japan, they made their old capital Kyoto an attractive site that draws millions of visitors year round," he said. "Thailand should do the same."
Also, Hong Kong, Dubai and Singapore have been developing many new magnets to lure international visitors.
According to Mr Kalin and Mr Chanin, efforts to make Thailand one of the best destinations in Asia will only succeed with full cooperation between the government and the private sector.
The two agreed that the Thailand Riviera, a project that recently received the green light from the cabinet, could be a new magnet drawing tourists to the west coast of the Gulf of Thailand, home to Hua Hin and Cha-am.
The Thailand Riviera project was dusted off after the cabinet approved a high-speed railway linking Bangkok to Hua Hin. The study of the train project is under way, with bidding documents to be finalised and sent to the cabinet for consideration this year.
The government also has plans to extend the route of the high-speed railway from Hua Hin down to Chumphon and Ranong provinces.
Ten months after handing over the first 737 Max 8, Boeing has now delivered the second major variant in re-engined single-aisle family with Thai Lion Air taking the first 737-9 in a 21 March ceremony in Renton, Washington.
The stretched single-aisle powered by CFM International Leap-1B engines completed a 10-month certification effort in January, clearing the way for the Lion Air subsidiary to accept the first aircraft from Boeing.
"The 737 has been the backbone of our business since we began and we will use the added capacity the airplane provides to expand our network and start additional routes to Bangladesh, China and India," says Darsito Hendro Seputro, chief executive and chairman of Thai Lion Air.
Another Lion Air subsidiary, Malindo, took delivery of the first 737-8 and launched operations last May.
In addition to a stretched fuselage, the 737-9 includes the same package of upgrades that Boeing introduced with the Max family. To reduce fuel consumption, Boeing replaced the CFM56 on the 737NG family with the Leap-1B, added the dual-feather Advanced Technology winglet and resculpted the tail cone into a cleaner, circular shape.
"The Lion Air Group is the perfect example of how the 737 Max family provides a common fleet solution across the single-aisle spectrum," says Boeing Commercial Airplanes president and chief executive Kevin McAllister.
The first delivery of the the 737-9 comes five days after the next major variant in the 737 Max family flew for the first time. The shortened 737-7 is scheduled to complete certification testing by the end of the year and enter service in 2019.
The 737-10, a further stretch of the 737-9, will enter service a year later.
Thai Airways’ MRO arm, Thai Technical, hopes to incorporate its U-Tapao-based joint venture MRO with Airbus by the first quarter of 2020, for launch in 2022.
Thai Technical’s director of MRO strategy and business development Wilarp Thonglaxsanawong adds that feasibility studies with Airbus are "around 80% complete” and that the joint venture agreement is expected to be signed by December.
Thonglaxsanawong’s comments follow a cooperation agreement in December 2017 between Thai Airways International and Airbus to explore MRO business opportunities at U-Tapao airport, after signing a memorandum of understanding in March 2017.
He adds that in 2021, Thai Technical will apply for certifications with the United States Federal Aviation Administration, European Aviation Safety Agency and the Civil Aviation Authority of Thailand.
Thonglaxsanawong adds that should Airbus not proceed even after completing the assessments, Thai Technical will go ahead with the new MRO facility at U-Tapao.
Located 140 km south of Bangkok in the eastern province of Rayong, U-Tapao airport has been earmarked by the Thai government as a capacity reliever for the capital’s Don Mueang and Suvarnabhumi airports.
Thonglaxsanawong says that Thai Technical’s new MRO facility will occupy a land area of 83 acres, and offer various MRO services including line and heavy maintenance. It will also conduct wheel and brake work, as well as engine and component overhauls.
The facility will be able to support various aircraft types including the Airbus A380, A350, A330 and A320, as well as Boeing types such as the 747, 777, 787 and 737.
The U-Tapao Airport Authority has said that the MRO site will initially have a single hangar capable of accommodating three widebodies and four narrowbodies, with Thai Technical as the sole operator in the first five years of operations. Thereafter, the authority will look to construct a second hangar for third-party MRO work.
Thai Technical forecasts that the facility can generate $86 million annually after 10 years, and $629 million annually by 2072, a half century after operations begin. In addition, Thai Technical hopes to capture “at least 20%” of Southeast Asia’s MRO market.
“We have land at U-Tapao to cater to the growing aircraft fleet in this region and manpower cost are lower in Thailand as compared to our regional neighbors,” he adds.
NEW city planning for the Eastern Economic Corridor (EEC) is expected to be finished before May this year, according to Department of Public Works and Town and Country Planning’s deputy director-general Anuwat Suwannadej.
The EEC office is gathering information to draw up the development plan to serve the project development in future, he said at a seminar on the new cities and their benefits hosted by the Thansettakit Thailanguage newspaper late last week.
Besides the expansion of the existing industrial zones in the EEC from the present 350,000 rais (56,000 hectares), the development will also have to serve the establishment of the new cities, including an aviation city.
Jane Namchaisiri, chairman of the Federation of Thai Industries (FTI), said that the development of the EEC would lead to the rollout of new infrastructure such as power plants to serve the demand of expanding industrial projects.
He added that new sources of fresh water would also be needed in order to serve the demand from industries in the zone. The EEC has also attracted international schools to open their schools in the zone, he said.
Vietnam’s skies are filling up quickly. Following launch announcements from AirAsia Group and Bamboo Airways, Vietstar Airlines, another local start-up, is hoping to receive an air operator’s certificate (AOC) this year.
VietStar Aero Engineering Co. commercial director, Trinh Quoc Cuong, said the MRO provider was looking to lease five B737-800s to start scheduled passenger services in 2018.
The low-cost airline plans to increase its fleet to 15 aircraft by 2020 and fly domestic and international routes.
At this stage, however, it remains unclear if and when Vietstar might receive its AOC. Vietnam’s aviation authorities have held back on licencing new entrants because of growing capacity bottlenecks at Ho Chi Minh City Airport, the gateway to the country.
VietStar Aero Engineering Co. provides MRO services for Jetstar Pacific and VietJet Air aircraft at Ho Chi Minh Airport. It owns three hangars at the airfield, capable of simultaneously servicing five single aisle aircraft.
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