Some 6,500 rai of areas around U-tapao airport will be developed into a special investment promotion zone on aviation, a key component to support the government's much-touted Eastern Economic Corridor (EEC) scheme.
Kanit Sangsubhan, secretary-general of the EEC Policy Committee, said the plan to upgrade the surrounding areas into an aviation zone was approved at the committee's first meeting, chaired by Prime Minister Prayut Chan-o-cha.
The 6,500-rai aviation zone will cover aircraft-related business, air cargo and warehouses, which will be 100% open for foreign investment.
The committee also approved yesterday an 8-billion-baht investment budget for a second runway at U-tapao airport. The outlay will come from the central budget of fiscal 2018.
The second runway is expected to be operational in three years.
The government will also allow public-private partnership (PPP) for the airport's second terminal.
The terminal is scheduled to be finished in five years, increasing capacity at the airport to 15 million passengers, up from 3 million.
U-tapao development is part of Thailand's ambitious plan to be a regional aviation hub. After raising the airport's capacity to 15 million passengers in the first phase, the second phase calls for servicing 30 million passengers in 10 years. The final stage is to handle 60 million passengers in 20 years.
The development is projected to require combined investment of 200 billion baht.
U-tapao airport development is the first infrastructure project the government seriously wants to open for bidding this year, he said.
Other fast-track developments are the Bangkok-Rayong high-speed rail project worth 158 billion baht, which is expected to be opened for bidding this year under the PPP scheme, the 88-billion-baht third phase of the Laem Chabang deep-sea port, and the 64.3-billion-baht double-track rail link between the three deep-sea ports of Bangkok, Laem Chabang and Map Ta Phut.
Mr Kanit said the premier is set to invoke Section 44 to expedite the PPP scheme, completing the investment process in eight to 10 months.
The National Economic and Social Development Board has been assigned to map out the new government centre and residential areas in Chachoengsao province. The project is expected to take 15 years and cost 200 billion baht.
In a related development, Gen Prayut yesterday witnessed the signing of three memoranda of understanding (MoU) on aeronautical industry development between the Royal Thai Navy, Thai Airways International Plc and the Civil Aviation Training Centre. The first MoU calls for the first phase of development of an aircraft maintenance centre, while the second details the first phase of air freight and logistics development. The third MoU underlines cooperation on personal development in the field of aerospace.
In a separate MoU signing, PTT Plc, 50 educational institutes and some private companies agreed yesterday to establish an Eastern Economic Corridor on Innovation worth 1 billion baht.

Aergo Capital has taken delivery of one new 737-900ER (MSN 43188) aircraft from Boeing and leased the aircraft on a long-term lease to Thai Lion Air, part of the Lion Air Group. PK AirFinance, together with the Korean Development Bank, provided funding for the transaction on delivery.

“We are delighted to close our sixth aircraft transaction with the Lion Air Group and we are excited about working with Thai Lion as it expands its international operations,” said Fred Browne, CEO of Aergo Capital.

“We appreciate the great support of Aergo who is currently a lessor to 3 airlines within the Lion Air Group, across various aircraft types in a short timeframe. We look forward to deepening and strengthening this relationship further,” commented Edward Sirait, CEO of Lion Air Group.

Captain Darsito, Managing Director of Thai Lion Air, noted, “The B737-900ER is perfect for the Thai market and great for our business development. Currently we are flying to 12 cities in Thailand and 13 international routes. We hope to keep expanding our network with the support of great partners like Aergo Capital.”

Smith, Gambrell & Russell (English counsel), A & L Goodbody (Irish counsel), Mochtar Karuwin & Komar (Indonesian counsel), Clifford Chance (Thai counsel) and KPMG (tax consultant) acted for Aergo Capital while Thai Lion Air availed of the in-house legal team at Transportation Partners. Clifford Chance acted as lead counsel for Lenders.

The acquisition was facilitated by Transportation Partners and the aircraft will be operated by Thai Lion Air on domestic and international routes. This acquisition brings Aergo’s fleet to 29 aircraft.

Lufthansa Technik AG is filling important leadership positions to support its continued expansion in Asia Pacific (APAC).

Following the successful restructuring of the local sales organization, the Aircraft Overhaul and Component Services divisions will now also be managed directly from the region. With Elmar Lutter, one of the company's most experienced top managers is taking over the Aircraft Overhaul division in Asia Pacific. He will assume his new position on 1 June and work from Manila in the Philippines. During the course of his international career, Lutter has headed production departments within Aircraft Overhaul in Hamburg and Manila and worked as the CEO of Lufthansa Technik Budapest. Most recently, he was responsible for establishing and managing Lufthansa Technik Puerto Rico.

Burkhard Pfefferle-Tolkiehn, who will head Asia Pacific's Components division as of April 1, has chosen Hong Kong as his base. He has spent many years working in leadership positions within the Component Services division, most recently as Vice President in Hamburg, where he was responsible for the global material supply to more than 800 Lufthansa Technik customers.

With Gerald Steinhoff, Lufthansa Technik's sales organization relocated top management functions to the region as early as 2014.

Working from Singapore, Steinhoff and his team established new regional sales structures for Lufthansa Technik that have already brought impressive successes, resulting in annual revenue growth of over 20 percent.

These most recent staffing decisions are the next step in Lufthansa Technik's growth program in the Asia Pacific region. The company is following up its ongoing efforts of building and expanding production sites by establishing a local leadership structure directly in the region - in close proximity to the customer.

The Asia Pacific region is particularly important for the company, and has boasted growth rates in the double digits for years now. Extensive contracts for component supplies and landing gear overhauls were recently concluded with Go Air and Air India, for example. Initial successes have also been achieved with the new aircraft types - for example, with China Airlines as the first A350 customer for component supply in APAC. Many customers in the region have been working with Lufthansa Technik for years. The new appointments will now bring these cooperations to a new, local level.

The government will prioritize the development of U-Tapao airport as the cornerstone of the Eastern Economic Corridor, the new development zone east of Bangkok that will showcase Thailand’s advancing digital economy, along with a high-speed railway linking the area to Bangkok, the deputy prime minister in charge of the economy said last week.

The two projects are among five major infrastructure developments planned by the government for the three-province zone that policymakers consider essential for the future of the nation in terms of its economy, competitiveness and development. Aside from serving as a home to advanced industries, the Eastern Economic Corridor, or EEC, will also contain model, green communities for a better and more sustainable standard of living.

Aerospace and aviation are among the advanced industries that will be headquartered in the EEC. Therefore, the development of U-Tapao, an airport once used by the United States military, has been prioritized, both for its role in spurring the growth of aerospace and aviation in Thailand and for the major part it will play in linking the corridor with global markets through transport and logistics.

THAI Airways International has announced its intention to build the region’s finest aircraft maintenance, repair and overhaul facility at U-Tapao, and last week European aircraft maker Airbus signed an agreement to invest in the new facility.

“The government will accelerate the joint aircraft-repair center between Thai Airways International and Airbus and arrange regulations for public-private partnerships to shorten the EEC implementation period to three months,” said Deputy Prime Minister Somkid Jatusripitak, who oversees the economic ministries.

Somkid said that when renovations and upgrades are completed, U-Tapao will be as large as Suvarnabhumi International Airport, the main international gateway in the Kingdom located on the outskirts of Bangkok. 

Thai Airways International (THAI) and Airbus this week signed a Memorandum of Understanding (MoU) to jointly “evaluate” development of a new MRO facility at Thailand’s U-Tapao International Airport, south of Bangkok. The MoU was formalised on Wednesday by Thailand’s deputy Prime Minister, Somkid Jatusripitak, Airbus Commercial Aircraft president, Fabrice Brégier, and THAI acting president, Usanee Sangsingkeo.

The proposed MRO hub will offer line and heavy maintenance services and utilize digital technology analysis of aircraft maintenance data. In addition it will offer clients UAV inspection of airframes, a repair centre for composite structures and a maintenance training centre for Thai and regional technical staff.

“This is a major milestone in our long and mutually beneficial relationship with THAI that dates all the way back to our earliest days at Airbus when THAI became one of our first customers in the 1970s,” Brégier said. “With the fleet in the region set to almost triple to over 15,000 aircraft over the next 20 years, this project represents a sound opportunity for Thailand to develop its footprint in the aerospace sector.

“We predict fleets operated by Asia-Pacific carriers will more than double in size in the next 20 years, from around 6,000 to more than 15,000 aircraft. All these aircraft will need to be serviced on a regular basis, representing a huge business proposition. In fact, we estimate the value of the MRO sector in this region alone will stand at around US$640 billion over the next decades

“THAI has been studying the development of a new MRO business with several potential partners and is pleased to reach this initial agreement with Airbus,” interim THAI president, Sangsingkeo said. The Thai government has prioritised aerospace and MRO sector as key industries in its ‘Thailand 4.0’ economic reform and innovation drive.

In recent years, Airbus has established MRO joint ventures with China Airlines, Singapore Airlines and Etihad Airways.