U-Tapao airport intends to relocate its planned new facilities, including a third terminal, close to the Eastern Economic Corridor (EEC) high-speed railway that will link three key airports, the airport's director Luechai Sri-eamgool said on Friday.
The airport, located in Rayong, is already going through a new land refit, following an announcement on June 4 by the EEC Committee -- headed by Prime Minister Prayut Chan-o-cha -- that 6,500 rai of U-Tapao's land area of more than 16,000 rai must be set aside for upcoming EEC development projects.
The projects comprise the high-speed railway, which is set to connect Don Mueang, Suvarnabhumi and U-Tapao airports, as well as new structures at U-Tapao including a maintenance, repair and overhaul (MRO) centre, a tax-free trading zone and a cargo depot.
As a result, U-Tapao's planned third terminal and second runway will be relocated to another part of the compound, said Rear Admiral Luechai.
The new site will be situated about 1.5km away from current terminals and runways, he said.
The EEC committee announced that the terms of reference (ToR) for the infrastructure projects, worth over 200 billion baht, would be announced by the end of next month. Auction winners are set to be found by October.
RAdm Luechai confirmed yesterday that the airport, which is jointly overseen by the Department of Airports and the Royal Thai Navy, has already set aside the land for the EEC development plans.
The director's comments are consistent with the committee's announcement, which also stated that land located within a 10km radius of the airport will be commercially developed to increase economic activity in the corridor.
"The future of U-Tapao airport is unclear, since operation rights can be transferred to the body which wins upcoming EEC development projects," he said. "It is likely that main operations will be conducted in new buildings under the development plan.
"There is no way of telling for sure even if the airport will still be called 'U-Tapao Airport' when the new plans are complete; it all depends on the EEC committee," he added.
He said the high-speed railway set to link the three airports is due to be located around 1.5km from U-Tapao's main passenger terminal.
The new EEC-backed terminal could be located closer to the planned railway station, he said, adding that its fate would be decided once the ToR are released.
In the meantime, the airport will expand its operations in line with passenger demand, he said.
RAdm Luechai said passenger numbers have doubled in the past year. He said it has serviced over 1.5 million passengers since the start of the current financial year. The number is set to rise to 2 million by year-end.
Last year it recorded just 1 million passengers, and 600,000 the year before, he said.
The number could rise to 3 million next year as new routes are established, he said.
Qatar Airways in January launched a Doha-U-Tapao flight, making it the first Middle Eastern airline to offer direct flights to Pattaya, a popular tourist site in Chon Buri.
U-Tapao has now opened 75% of its newly built second passenger terminal, with the remaining area, featuring duty-free shops and general airport space, set to open by January.
The new terminal, originally scheduled to fully open last August, was set to replace the first terminal. But RAdm Luechai said recently the original terminal could remain operational to offer a better service to travellers.
THAI Airways International (THAI) and Rolls-Royce yesterday signed a cooperation agreement with a view to equipping its maintenance facilities at Don Mueang airport to service the British engineering giant’s line of Trent aircraft engines.
The agreement signed for 10 years will see the two companies work together to explore how to expand Rolls-Royce’s Trent CareNetwork by building on THAI’s existing maintenance, repair, and overhaul (MRO) capabilities.
Becoming an authorised maintenance centre for Rolls-Royce would enable THAI to generate annual revenue of around Bt4-5 billion for the service within three years, an airline executive said.
THAI acting president Usanee Sangsingkeo said the agreement would build on THAI’s existing MRO facilities to enable the national carrier to repair the new engine types used by commercial airlines today.
THAI has the capability to expand its engine maintenance services for the Rolls-Royce Trent 700 engine used by Airbus A330 aircraft and the Trent 1000 engine on the Boeing 787 Dreamliner. By doing so, it would meet the needs of the regional market, making sufficient use of the maintenance facilities and further developing a business joint venture, Usanee said.
Usanee said the cooperation agreement was in line with government policies that promote the achievement of industry goals. Moreover, the establishment of MRO facilities for Rolls-Royce would serve as a new growth engine that will help in the development and eventual readiness of an aircraft maintenance centre in the Eastern Economic Corridor (EEC). Skills in the field of aircraft engine maintenance would be further developed and this would help the nation’s aviation industry become the best in the region, Usanee said.
Chris Cholerton, Rolls-Royce president – civil aerospace, said the collaboration was an important step for a relationship between THAI and Rolls-Royce that has spanned more than 50 years.
For Rolls-Royce, it would bring greater capability, flexibility and choice into the company’s service network, he said.
For THAI, it would not only mean more efficient servicing of its own engines but also open the door to providing those services to other carriers, creating a standalone revenue opportunity for the airline, Cholerton said.
“For Thailand, this will be a great opportunity to train, develop and to grow a talented and valuable engineering workforce here,” he said.
Cholerton said with the Rolls-Royce fleet of engines forecast to grow rapidly over the coming years, with all the associated maintenance requirements that will entail, this has to be a good thing for the country.
The British company is one of the world’s largest makers of aircraft engines.
Surachai Piencharoensak, THAI executive vice president, technical department, estimated that revenue from the centre in the first year would be Bt1 billion, rising to Bt4 to Bt5 billion annually after full servicing starts for both engine types – the Trent 1000 and Trent 700 - within three years.
Under the collaboration, Rolls-Royce would transfer clients to the centre and THAI would send its technicians to train at Rolls-Royce, Surachai said.
In the first phase, THAI would invest Bt500 million for equipment and training, he said.
The centre is expected to start operations in fourth quarter of this year with service for Trent 1000 in the first phase and full servicing for both of the Trent engine types in three years.
Its capacity at the beginning would be around 30 engines a year, with a maximum of 70-80 engines a year in three years, Surachai added.
THAI’s existing maintenance facilities at its Don Mueang base cover 250,000 square metres, with the engine section occupying around 50,000 to 60,000 square metres, he said.
The airline has about 3,500 technicians at its facilities and the company expected to increase this number by around 50-60 for the new centre.He said the two companies would make further studies into a model for a business joint venture.
The terms of reference (ToR) for the U-tapao aerotropolis worth over 200 billion baht will be open for bidding through a public-private partnership (PPP) in October, with the winner expected to be unveiled early next year.
The Eastern Economic Corridor (EEC) meeting on Monday chaired by Prime Minister Prayut Chan-o-cha mandated to develop the first phase of the aerotropolis within five years to support a linkage with the high-speed rail connecting three airports -- Don Mueang, Suvarnabhumi and U-tapao.
Adm Sophon Wattanamongkol, president of the Royal Thai Navy's advisory group, said the ToR is slated for auction via PPP this October, with the winners expected to be announced by January 2019.
The first phase of the 6,500 rai U-tapao airport and aviation centre will be capable of handling 15 million passengers in five years. Other projects include a second runway, business zone, maintenance repair overhaul (MRO), and air cargo.
The MRO, which is a joint venture between Thai Airways International Plc and Airbus, is expected to be settled when Gen Prayut visits France on June 25.
Investors from China, Japan, Europe, and the US have shown interest in investing in this aerotropolis project.
Earlier, Industry Minister Uttama Savanayana said five giant bidders were expected to join the upcoming auction of the 224.54-billion-baht high-speed railway linking the three airports.
He declined to disclose the company's names, saying only the project has been in the crosshairs of several local and foreign investors.
These are likely to include BSR Joint Venture, a consortium of BTS Group Holdings Plc (75%), Sino-Thai Engineering and Construction Plc (15%) and Ratchaburi Electricity Generating Holding Plc (10%).
PTT Group and Charoen Pokphand Group have also expressed their intention to join the auction and seek investment partners, along with firms from Japan and China.
The 2018 EEC Act allows foreign investors to own up to 51% stake, compared with general investment law capping foreign-owned share at 49%.
AirAsia has informed the government of its intention to invest in the MRO at U-tapao aerotropolis, with a total investment worth US$150 million (4.8 billion baht).
AirAsia's MRO will also offer its service to other airlines, and the investment is expected to attract around 10-20 companies to streamline their investments into Thailand.
The company will also look for investors in a low-cost terminal at the U-tapao airport. The investment sum is projected at 1.5 billion baht, while construction is expected to take between 12-18 months.
Kanit Sangsubhan, secretary-general of the EEC office, said the EEC committee yesterday agreed the government may need to build a medium-scale terminal at U-tapao airport, which can be completed within one year, because of higher arrivals at the airport.
The first terminal can handle 3 million passengers, while arrivals at the terminal are projected to reach 2 million by this year.
Mr Kanit said the committee has also authorised related public agencies to plan for the third phase of the U-tapao aerotropolis development plan.
The third phase involves increasing capacity to 15 passengers over the next five years, 30 million in the next 10 years, and 60 million within 15 years.
The EEC committee has also authorised the EEC office to conduct a study for the development of surrounding areas some 10 kilometres from U-tapao airport in order to prevent environmental problems.
"The government needs to prepare ahead with town planning and specific zoning for the aviation industry," said Mr Kanit.Industry minister Uttama Savanayana said the government plans to conduct international roadshows following the EEC Act's enforcement, with the first roadshows scheduled in Britain and France this June and others taking place in South Korea, Japan, and China.
Prime Minister Prayut Chan-o-cha will meet UK Prime Minister Theresa May and French President Emmanuel Macron during his Europe trip later this month to promote economic cooperation.
Gen Prayut is scheduled to meet the British premier on June 20 and the French leader on June 25, the last day of his trip, Deputy Prime Minister Somkid Jatusripitak said yesterday. A group of business people will also join the trip.
On Feb 12, British Foreign Secretary Boris Johnson paid a courtesy visit to the PM and invited him to visit the UK. He promoted UK expertise in science and innovation in aviation, education and security. Meanwhile, Thailand invited investors from the UK to invest in the Eastern Economic Corridor. On April 5, British's secretary of state for international trade, Liam Fox, visited Thailand and the visit resulted in the idea to set up a joint committee to look into economic cooperation, Mr Somkid said.
On June 25 when he meets the French president, Gen Prayut will follow up on cooperation matters after Thai Airways International (THAI) signed an agreement with Airbus to study business opportunities in aviation maintenance, repair and overhaul (MRO) centre at U-Tapao Airport with an initial investment value of 2 billion baht.
Thai Airways International PCL’s new chairman will be a senior official from the Ministry of Finance tasked with coordinating between the flag carrier and its majority owner, a senior government source said on Friday.
The government will appoint Ekniti Nitithanprapas as chairman of the board of directors “soon”, the person said, who declined to be identified as the matter was still confidential.
Ekniti currently heads the ministry’s revenue department. His brief is to “coordinate” between the ministry - which owns 51 percent of the airline - and incoming chief executive, Sumeth Damrongchaitham, to enhance efficiency, the person said.
Ekniti, who headed the ministry’s State Enterprise Policy Office from 2015 to 2018, will replace the acting chairman, Air Chief Marshall Treetod Sonjance.
The new leadership comes during the final phase of a restructuring plan which began in 2015 and was aimed at restoring profitability. The airline is one of several major state-controlled firms to undergo reform since the military government assumed power in 2014.
Thai Airways reported a net loss in 2017 and a 14 percent fall in net profit for January-March.
The government has expressed confidence that investors will be drawn to a massive project that will see U-Tapao International Airport redeveloped as part of an overall plan for an Eastern Airport City.
Industry Minister Uttama Savanayana recently conveyed the government’s optimism for the project – a key element of the Eastern Economic Corridor (EEC) – when he revealed that the terms of reference (TOR) for the development would be released soon. An Industry Ministry source this would happen by July.
The project will be opened to private companies to compete for work on the aviation facilities that will cover 570 rai.
Demonstrating its conviction, Thai Airways International (THAI) has allocated Bt10 billion for investment in the development of a maintenance, repair and overhaul (MRO) centre on 210-rai plot within the complex.
“Even though the development of U-Tapao International Airport and the Eastern Airport City has been delayed as a result of waiting for the implementation of the Eastern Economic Corridor Act, which became effective in the middle of this month, we are quite confident that we will get the names of investors for different projects for the development of U-Tapao International Airport and the Eastern Airport City this year,” Uttama said. “Under the original timeframe, the invitation for private sector to invest in the U-Tapao project was to be conducted between March and June this year and the names of those who win the bids would be announced in September.
“Then, the contracts will be signed in October this year. However, you can see our urgency to make progress, such as for the high-speed train project that will connect three airports, Don Muang, Suvarnabhumi, and U-Tapao. We have just announced the invitation for interested private investors to participate in the bidding, and they are invited to respond by June 17.”
Kanit Sangsubhan, secretary-general of the EEC Office, said that Prime Minister Prayut Chan-o-cha on June 4 will chair a meeting of the policy committee of the Eastern Special Economic Zone, which will be the first such meeting since the EEC Act took effect. “At the meeting, the plan and strategy for the U-Tapao airport and the Eastern Airport City project will be offered for approval. The aim is to push the U-Tapao development project to be fully completed at the same time as the high-speed train project that connects the three airports,” Kanit said.
A source from the Ministry of Transport said that the TOR documentation would be released by July, paving the way for the bidding process for the MRO centre at U-Tapao airport. The source indicated that the framework for the TOR would be set with sufficient flexibility to encourage many private companies to participate in the process.
“THAI previously indicated a likelihood that it would manage the whole aircraft maintenance facility at U-Tapao airport in partnership with Airbus,” the source said. “However, the national carrier recently informed us that it would occupy about 200 rai of the space, out of the whole 570 rai plot, for their own MRO Campus. Due to many land sites remaining vacant in the facility, it is a sign that the government will open the bidding widely to any private investors that are keen to set up their own MRO facilities in the area, and for them to join immediately in the project.”
U-Tapao Airport Authority director Rear Admiral Luechai Sri-Eamgool said that the development of U-Tapao airport and the Eastern Airport City would consist of existing service areas in which the government will allocate additional investments, such as a second runway, an aviation training centre, and an infrastructure system to cater for expansion.
The airport development will also open new service areas, including the government’s investment in the first phase of MRO centre and air cargo in cooperation with THAI, and the first phase of the training centre for aviation personnel in cooperation with Civil Aviation Training Centre.
He said that after the first-phase development, the second-phase projects will enable the investment by private companies. They include the Passenger Terminal 3, the Commercial Gateway, air cargo, the second-phase development of the MRO centre and the training centre for aviation personnel, and a free-trade zone facility for the aviation industry and the business sector.
For the progression of the development, the advisory team is adjusting the design of the airport space after finding that the design for the second runway, which is under the first-phase development plan, puts it too close to nearby mountains and a motorway.
The adjustment will see the design enhanced and the new design of the airport space will be finished in June. After that, the airport development project will be submitted to the government for consideration and then enter into the stage that will be opened for private firms to participate in.
“We are confident that within the fourth quarter of this year, we will be able to open the bidding process and have the names of private firms that will awarded concessions in all investment projects on the development of the 6,500-rai plot at U-Tapao airport,” said Luechai.
“For the development of the MRO centre, THAI has informed us of its intention to utilise only 200 rai of land,” he said. “So, it is possible that the remaining area will be allocated to other private investors, who are interested to develop their own MRO facility. However, it depends on the government’s policy towards the matter.” Luechai said that THAI had previously expressed interest in the air cargo project, but the authority has not yet received direct contact from the online on its current intentions for air cargo.
The Royal Thai Navy, which owns the site for the air cargo facility under a right granted by the Treasury Department, has returned the budget for designing the air cargo facility back to the government. It is also possible that the authority may take back this land and seek bids from private companies. Luechai said U-Tapao International Airport can handle about 20 million passengers a year using its single runway of 3,500 metres. The existing passenger terminal can cater to about 700,000 domestic and international passengers a year, and this number would increase to 20 million after the completion of the overall project, Luechai said.
FL Technics is growing its footprint in Asia-Pacific with plans to establish base maintenance facilities in China and Thailand.
Speaking at Aviation Week Network’s ap&m summit in London on Tuesday (May 29), Zilvinas Lapinskas, CEO of FL Technics, says the company expects announcements within the next two months for a base maintenance facility in at an unconfirmed location in China, which will be the result of a joint venture with a local company.
It will also establish a presence in Thailand to carry out heavy checks with a similar plan to partner with local vendors to start a joint venture, Lapinskas says. “The agreement is about to be signed and it will take around one and a half to two years to open the hangar,” he says. “Our plan is to open four to five bays including one slot allocated for painting.”
FL Technics’ expansion in Asia-Pacific, a region estimated by Aviation Week Forecast data to grow at an annual rate of 4.8% over the next decade, follows the opening of its Indonesia operation in Jakarta in late 2016, where it operates a base and line maintenance center located close to the city’s Soekarno-Hatta International Airport.
The 9,000m2 facility holds capacity for up to three narrowbody aircraft simultaneously and holds approvals for Boeing 737 classic and next-generation aircraft, along with Airbus A320 family variants.
Lapinskas says its continuing expansion plans emanate from the growth of the fleet in the Asia-Pacific region. “We were looking at the growth of the Asia-Pacific fleet around three to four years’ ago and decided to pursue opportunities in that region in the form of our Jakarta facility,” he says.
Thailand’s ‘boutique airline’, Bangkok Airways, will order 20 single aisle jet aircraft this year, airline president, Puttipong Prasattong-Osoth, told Bloomberg this week.
He said the carrier will ask for request for proposals from Airbus, Boeing and Bombardier, although the eventual order will be with a single OEM.
“The good thing is, once we change our planes to the same model, the cost of operations and maintenance will be lower,” Prasattong-Osoth said. Bangkok Airways operates a fleet of 14 A319ceo and nine A320ceo. They have near perfect commonality. The airline also has six ATR72-500s and nine ATR72-600s. Earlier this year, Bangkok Airways confirmed purchase of four more -600 turboprops to replace older versions of the type.
The Suvarnabhumi Airport-based airline flies to 30 destinations in 11 countries, including the Maldives, Hong Kong and Mumbai.
Bangkok Airways has almost been consistently profitable for the last decade and Prasattong-Osoth expects revenues in 2018 will increase 8% year-on-year, to THB28.5 billion baht, despite mounting competition and higher fuel costs.
The airline holds a 33% equity in Samui Airport. Prasattong-Osoth said the airline would like to increase that when the time and price was right. It also has major shareholdings in Sukhothai and Trat Airports.
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