More pilot training centres are required to meet the projected rising demand for aircraft across Asia-Pacific, including Thailand, over the next 20 years, ATR's vice president for training and flight operations, Christian Commissaire, said yesterday.

For ATR aircraft alone, the demand for trained pilots averages at about 1,500 worldwide each year, with up to 700 of them destined for the Asia-Pacific region. This supply of new pilots is needed to keep pace with the company’s delivery of an average of 80 aircraft a year to airlines across the world, Commissaire said in a group interview.

He added that, on average, a newly delivered ATR aircraft requires five pilots and five assistants for air services. Training takes about 24 months at a cost of up US$150,000 per pilot.

With the high cost of training, that limits the supply of qualified pilots to meet the strong demand in the market, Commissaire said.

“We have a training centre in Singapore and Miami in the US, with two in France, and another in Johannesburg, South Africa,” he said. “They can produce an average of 500 new pilots a year, but that is still not enough to the meet the demand for new pilots that averages about 1,500 a year.

“However, we have collaborated with other pilot training centres in the world to train new pilots to help go towards meeting this strong demand.”

According to a survey by aircraft maker Boeing, the commercial airline industry will require 635,000 new pilots over the 20 years from 2017, in response to a doubling in the size of the global aircraft fleet and the record demand for air travel.

Of the total demand for new pilots, up to 261,000 new pilots will be required for Asia-Pacific from 2017 to 2037.

The figure was included in Boeing's 2018-2037 Boeing Pilot and Technician Outlook published at EAA AirVenture Oshkosh recently.

For Thailand, the country is projected to have more than 55 new aircraft from 2018 to 2037, with Thai Airways International Plc accounting for 28, Bangkok Airways Plc with 20, and Thai Air Asia Co Ltd with seven, according to a recent survey The Nation. This means they need more than 550 new pilots and assistants from this year to 2037. 

The airlines will also need more new pilots to replace those who will retire during that period. This demand is based on the assumption of five pilots and assistants for one aircraft.

“Bangkok also has a pilot training centre that have enough capability for the training of new pilots to serve the country's aviation growth,” Commissaire said.

Boeing notes in its Business Environment Update report for 2018 that there are 295,000 active commercial pilots around the world.

More broadly, the 2018-2037 Pilot and Technician Outlook also forecast the need for 96,000 business aviation pilots and 59,000 civil helicopter pilots over the next two decades. The report marks the first time that the Boeing report has offered a view on these two sectors.

In line with the strong projected demand for pilots worldwide, including Asia-Pacific, all players in the aviation sector share a responsibility to ensure there are sufficient training facilities to meet the demand for cockpit crews.

ITALY-based aviation manufacturer ATR is intent on expanding its business in Asia Pacific, seeking a big slice of the forecast demand for up to 1,000 turboprop aircraft in the region over the next 20 years, the company's sales director Laurent Janitza said yesterday.

Janitza said that demand for aviation services in Asia-Pacific would see strong growth, benefiting from increased tourism flows.

He pointed to Thailand’s special position, providing travel linkages to neighbouring countries in the Asean region.

“There have been a number of new routes building on linkages between Thailand and neighbouring countries, including Myanmar, Laos, Vietnam and Cambodia,” he said in a group interview.

“Thailand serves as a hub for Asean countries. As a result, we expect our business will expand in Thailand from now until 2037. However, we cannot estimate our market value in Thailand at this time.”

Janitza said he is encouraged by the government’s policy to develop the U-Tapao International Airport under the ambitious vision for the Eastern Economic Corridor (EEC). Recently, the government also announced plans to develop infrastructure and a new international airport in the South. The projects for the Eastern and Southern regions form part of a drive to boost demand for aviation in Thailand and ensure strong growth in this sector, Janitza said.

The company has taken an order to deliver four aircraft to Thai operator Bangkok Airways. This comes under orders it has received for 130 aircraft to be delivered to customers in Asia Pacific from now until 2022, Janitza said.

At present the company has 20 aircraft operating in Thailand.

Janitza added that its parent company Airbus has been expanding its investment to develop a maintenance centre at U-Tapao airport under a collaboration with Thai Airways International Plc. The project in Rayong forms a part of the group’s efforts to support its business in Thailand.

A major stake is held in ATR by Airbus and Leonardo. The company has a production plant in Toulouse in southern France. ATR bills itself as the world leader in the market for regional aircraft of up to 90 seats.

Brisk sales pace 

ATR has sold nearly 1,700 aircraft and has more than 200 operators in more than 100 countries.

ATR says its turboprops provide airlines with the best opportunities for operating short-haul routes at a low operating cost. Airlines servicing smaller markets need more fuel efficient-aircraft to continue operating regular flights between regional airports and to main airports and hubs.

For 2017, the company reported turnover of US$1.8 billion.

The company expects to increase its market share in turboprops in Asia-Pacific, especially in Indonesia, the Philippines, and Taiwan. This is due to strong demand, boosted by moves in most Asia- Pacific countries to sign agreements for new air routes that will drive the demand for turboprops.

Janitza said the growth in demand for Asia-Pacific would be stronger than that forecast for Europe and the United States.

Indonesia is ATR’s largest market, with 99 aircraft in operation. It is followed by the Philippines with 22 aircraft.

The company has opened a facility housing a customer service centre, a spare parts warehouse and a training centre in Singapore that will support its business in Asia, Janitza said.

Low-cost carriers have changed the face of civil aviation in Asia. In tandem with the rise, the behind-the-scenes market for aircraft maintenance is also changing as companies in countries like Indonesia and Thailand enter the field to challenge the dominance of established Singaporean players.

GMF AeroAsia, the maintenance subsidiary of Garuda Indonesia, opened the world's largest maintenance hangar for narrow body aircraft in 2015 at Soekarno-Hatta International Airport, the gateway to Indonesia, located outside of Jakarta.

The hangar has space for 16 airplanes. Besides aircraft of Garuda and its low-cost affiliate Citilink, planes of various foreign LCCs, including AirAsia, India's IndiGo and Russia's Nordwind Airlines, are also parked, awaiting servicing.

At the facilities, numerous mechanics wearing blue uniforms work in groups, carrying out tasks for specific portions of the aircraft, such as wings and engines.

"We have a lot of demographic [advantage] with a huge population and young workforce in Indonesia," GMF President and CEO Iwan Joeniarto told the Nikkei Asian Review.

The country's population of 261 million is the largest in Southeast Asia. The average wage of general engineers in Jakarta is one-sixth of their Singaporean counterparts, according to a survey by the Japan External Trade Organization in 2017.

Since aircraft maintenance is a labor-intensive business, Joeniarto said, lower labor costs give the company a competitive advantage over Singapore. 

For decades, the commercial aircraft maintenance, repair and overhaul (MRO) market in Southeast Asia has been controlled by leading players in Singapore, the regional aviation hub. These Singaporean companies have been providing maintenance services for airlines both in and outside the region.

But they are now facing more competition from service providers in countries such as Indonesia, Thailand and Malaysia.

LCCs are the driving force behind the explosive growth of Asia's civil aviation market, but most of them, including such leading players as AirAsia, the region's largest budget carrier, have only minimal maintenance capabilities and outsource most of the work to companies affiliated with rivals or independent service providers.

Commercial aircraft are required to be inspected and maintained after every flight and overhauled every few years.

Since the aircraft generate no profits while they are being maintained, airlines, especially budget carriers, value quick and efficient turnaround, which can be achieved by intensive use of manpower. This means opportunities for cost-competitive players.

GMF's Joeniarto said the growth potential of Indonesia's domestic airline market thanks to the country's configuration -- a long chain of islands scattered over a wide area -- is also a big boon to the company's business prospects.

GMF plans to spend $400 million in the next five years to expand its maintenance facilities with a strong focus on narrow body aircraft, the popular aircraft type among LCCs. The company, which currently operates four maintenance hangars at Soekarno-Hatta airport, will open new facilities on the Indonesian island of Batam, close to Singapore, in 2019.

The island's wage levels are even lower than in Jakarta and its location is closer to key markets, including Thailand, Vietnam, Japan and South Korea.

GMF plans to open new maintenance facilities in South Korea and the United Arab Emirates as well, through joint ventures with local partners. To maintain cost competitiveness, Joeniarto said its overseas sites will also use Indonesian mechanics that have trained and worked in Jakarta.

In Asia's airline industry, the rise of LCCs has sharply intensified price competition, creating a harsh business environment for major full-service carriers like Garuda, which fell into the red in 2017.

These companies are now seeking to capitalize on the growth of no-frills rivals through the maintenance business. "We want to follow Lufthansa," Joeniarto said. With a sizable business with non-affiliated airlines, Lufthansa's MRO unit accounted for roughly 15% of overall revenue in 2017, the second-largest source after passenger revenue of its group airlines.

Japan's ANA Holdings will jump on the bandwagon by launching maintenance services at Naha Airport in Okinawa Prefecture, close to Asia, in 2019.

Thai Airways International, Thailand's national flag carrier, which also reported losses in 2017, is banking on the expanding MRO market too.

In June, it agreed with Airbus to open a maintenance location within the Eastern Economic Corridor, a special economic zone on the coast of the Gulf of Thailand. Total investment is to be around 11 billion baht ($329 million).

Also in June, Thai Airways was certified by Rolls-Royce as an authorized center to do MRO on the British firm's Trent engines. Thai Airways will not only be serving engines of its own fleet but also those of rival carriers at Don Mueang International Airport, Bangkok's LCC hub.

Meanwhile, Singaporean maintenance powerhouses are turning to state-of-the-art technology such as automation to offer high-quality maintenance and keep their competitive edge.

The aerospace arm of Singapore Technologies Engineering, the world's largest airframe maintenance provider, has started testing unmanned vehicles that fly over aircraft to detect airframe problems such as cracks, stains and scratches.

In a pilot program with Air New Zealand, the company has also started producing spare parts for in-flight equipment such as cup holders and seat tables using 3D printing. This reduces the time to replace broken parts and cost of inventory.

"We want to do more with less people," ST Aerospace President Lim Serh Ghee said. He stressed that the company is pursuing higher efficiency instead of lower labor costs. It also wants to provide "high-value" services to its clients, such as converting retired passenger aircraft to freighters.

In 2017, Singapore Aero Engine Services, a joint venture between Singapore Airlines' MRO arm SIA Engineering and Rolls-Royce, established a new research and development body jointly with Singapore's Agency for Science, Technology and Research.

With an investment of up to 60 million Singapore dollars ($43 million), the joint lab will conduct a five-year study of automation and digital technologies for next-generation aerospace manufacturing and MRO capabilities.

"Labor is expensive in Singapore, but skills and capabilities far outweigh that cost ratio," said Bicky Bhangu, president of Rolls-Royce for South East Asia, Pacific and South Korea. He added that Singapore's existing ecosystem -- Rolls-Royce has an engine manufacturing facility there -- also means greater efficiency in MRO operations.

The expansion of the MRO market is in response to a rapid increase in the number of aircraft operating in the region.

Some 40% of the world's new aircraft deliveries during the 2018 to 2037 period, estimated at 42,000 planes, will come from the Asia-Pacific region, according to Boeing.

Southeast Asian LCCs are expected to be large buyers, adding to airlines of the two emerging giants of China and India. That spells robust growth in demand for airframe and engine maintenance services in the region.

Frost & Sullivan, a market research firm, predicts that MRO spending in Asia, excluding China, will reach $27.1 billion in 2027, up 55% from 2017.

Southeast Asia will account for 40% of that, with Indonesia and Thailand leading the upward trend by growing nearly 100% to surpass Singapore and become the region's two largest markets.

If these countries fail to expand their domestic maintenance capabilities, domestic airlines will have to outsource the services to providers outside the countries. Already in 2017, 60% of aircraft maintenance services for Thai carriers was provided by foreign companies.

The Thai government is taking steps to change this situation by promoting the domestic maintenance industry, including generous tax incentives modeled on Singapore's program.

In a bid to speed up development, the Eastern Economic Corridor of Digital (EECD), one of the flagship developments under the government's much-touted EEC scheme, will be developed under the public-private partnership (PPP) model.

According to Kanit Sangsubhan, secretary-general of the EEC Office, Friday's EEC Committee meeting chaired by Prime Minister Prayut Chan-o-cha approved the PPP plan for the EECD.

The scale of investment for the new industrial estate for digital business has yet to be finalised.

Mr Kanit said the private sector will bid to develop and handle the EECD and will be allowed to screen investment projects and take charge of the investment.

The terms of reference (ToR) for the EECD are expected to be completed by November or December this year, with the bidding process set to begin early next year.

In a related development, the EEC Office reported that investment applications for the EEC during the first half of the year totalled 142 projects worth 183 billion baht.

The EEC Office is confident that investment applications for the EEC will exceed the 300-billion-baht target this year.

Actual investment is expected to account for more than 60% of the applications, Mr Kanit said.

According to Mr Kanit, the committee on Friday also approved the selection of a new secretary-general for the EEC Office, as required under the EEC Act, which will be enacted in May.

Mr Kanit was appointed under Section 44. However, Mr Kanit is highly likely to be reappointed as new secretary-general of EEC Office, as he is one of three candidates.

Mr Kanit said he wants to continue working for the EEC Office, citing many significant infrastructure projects that are being processed, including the high-speed rail network to link three airports, the aerotropolis, the third phase of the Laem Chabang and Map Ta Phut ports and the maintenance repair overhaul (MRO) facility at U-tapao airport.

Mr Kanit said the committee on Friday also acknowledged the progress of significant projects in the EEC, including the high-speed rail route linking the three airports.

The ToR for the high-speed train project has been purchased by 31 companies from seven countries.

The EEC Office is expected to announce the winning bidder in January next year. The high-speed train connecting the airports will begin operations after five years.

The committee on Friday also approved the extension of high-speed rail to reach Trat province.

According to Mr Kanit, the MRO project is expected to call for bids by next September, while the third phase of the Laem Chabang and Map Ta Phut ports is expected to be won by bidders in February 2019.

In a separate development, Usanee Sangsingkeo, acting president of Thai Airways International Plc (THAI), said the company signed a memorandum of understanding (MoU) with the Royal Thai Navy and EEC Office on Wednesday to let THAI operate at U-tapao airport.

Under the MoU, the EEC Office, which owns EEC, and the Royal Thai Navy, which manages the EEC area, will hand over authority for THAI to operate and provide services at the MRO facility, known as TG MRO Campus, that will be constructed at U-tapao.

Once the project receives approval in principle from the EEC Office and the cabinet, THAI and the EEC Office will enter into an agreement to establish leasing conditions and benefits, compensation, and rights and responsibilities.

The MRO at U-tapao is planned as a cutting-edge facility for the commercial aviation industry.

Services will range from ramps handling technical maintenance and various type of aircraft maintenance, fully equipped with the most modern technology, and auditing that will be able to analyse and forecast aircraft maintenance tasks.

The TG MRO Campus will be equipped with smart hangars that will reduce costs and be eco-friendly, including an aircraft engineer training school that paves the way for a strong future for aviation and aircraft maintenance in Southeast Asia.

Admiral Naris Pratumsuwan, Commander-in-Chief, Royal Thai Navy, Mr. Chokchai Panyayong, Deputy Secretary-General, Eastern Economic Corridor Office (EECO), and Mrs. Usanee Sangsingkeo, Acting President, Thai Airways International Public Company Limited (THAI), together signed a Memorandum of Understanding (MOU) that grants THAI the rights to operate at U-Tapao International Airport in the Eastern Special Development Zone.

Also present at the MOU Signing Ceremony in the Banquet Room at the Royal Thai Navy, Wang Nantha Utthayan area, were Admiral Sophon Wattanamongkol, President of the Royal Thai Navy Advisory Group, Flying Officer Chalermpol Intarawong, Director of the Infrastructure Office, Eastern Economic Corridor Office (EECO), Mr. Surachai Piencharoensak, THAI Executive Vice President, Technical Department, Mr. Ekniti Nitithanprapas, THAI Chairman of the Board of Directors, and Flight Lieutenant Kanok Thongpurk, THAI Executive Vice President, Legal Management and General Administration.

Mrs. Usanee Sangsingkeo, THAI Acting President, said that the MOU with the Royal Thai Navy which allows THAI to operate at U-Tapao International Airport in the Eastern Special Development Zone. The MOU agreement results from the feasibility study and analysis that was conducted on the Aircraft Maintenance Center that will be constructed at U-Tapao International Airport, the outcome of which will be used as part of the agreement in principle for its eventual establishment.

At the MOU signing ceremony, the Eastern Economic Corridor Office (EECO), which holds ownership of the Eastern Economic Corridor (EEC), and the Royal Thai Navy, as the entity that manages the EEC area, handed over the authority for THAI to operate and provide services at the TG MRO Campus that will be constructed at U-Tapao International Airport. The TG MRO Campus, a pioneer project in the EEC area of vital importance to Thailand, is the result of successful cooperative efforts between THAI and the government sector.

Once the project receives approval in principle from the Eastern Economic Corridor Policy Committee and the Cabinet, THAI and the Eastern Economic Corridor Office (EECO) will enter into an agreement to establish leasing conditions and benefits, compensation, as well as rights and responsibilities. The agreement will enable the TG MRO Campus project to move forward according to laws and regulations concerned.

The Aircraft Maintenance Center at U-Tapao International Airport will be one of the most modern in the commercial aviation industry, with growth capacity for the next 20 years, technical services that are on time, suitable prices, high quality and safety, based on the concept “On Time, On Cost, On Quality.” Services will range from ramp handling technical maintenance and various type of aircraft maintenance, fully equipped with the most modern technology and auditing that will be able to analyze and forecast aircraft maintenance tasks. The TG MRO Campus will be equipped with a state-of-the-art Smart Hangar that will reduce costs and be environmentally conscious, including an aircraft engineer training school that paves the way for a strong future for aviation and aircraft maintenance in Southeast Asia.

AIRBUS and Thai Airways International (THAI) have signed an agreement to establish a new joint venture maintenance and overhaul (MRO) facility at U-Tapao International Airport in Rayong province.

The accord was signed on Friday at Airbus headquarters in Toulouse by Usanee Sangsingkeo, acting president of THAI, and Eric Schulz, chief commercial officer of Airbus, in the presence of Prime Minister Prayut Chan-o-cha. Also on hand was Guillaume Faury, president of Airbus Commercial Aircraft.

 The new MRO will be one of the most modern and extensive in the Asia-Pacific region, offering heavy maintenance and line services for all widebody aircraft types. The facility will feature the latest digital technologies to analyse aircraft maintenance data, as well as advanced inspection techniques, including the use of drones to monitor aircraft airframes.

 The MRO complex will also have specialised repair shops, including for composite structures, as well as a maintenance training centre offering extensive courses for technical personnel from Thailand and overseas.

 “THAI and Airbus have undertaken extensive studies to validate the business plan for this exciting project,” said Usanee. “Together we will develop one of the most advanced and efficient aircraft maintenance centres anywhere in the world. We are confident that this venture will bring significant economic benefit for THAI and will be a major driver in the development of the wider aerospace sector in Thailand.”

Faury said: “We are pleased to enter into this major agreement with THAI. This will further strengthen the long-term partnership between our two companies and also contribute to the success of Thailand’s new eastern economic zone. With the fleet of widebody aircraft in the Asia-Pacific region set to triple to around 4,800 aircraft over the next 20 years, the project represents a sound business opportunity for both our companies.”

Schulz said: “This latest agreement further consolidates our long and special partnership with THAI. This dates back to 1977, when THAI became one of our earliest customers. Since that time Thai has operated every single Airbus type and today flies the complete current widebody family – the A330, the A350 and the A380.”

Boeing is once again rocking its supply chain in its relentless quest for better cost control. This week, the Chicago-headquartered OEM announced a plan to form a joint venture with French engine maker and aerospace component firm, Safran, also a major Airbus supplier.
Boeing and Safran have agreed to jointly design, build and service Auxiliary Power Units (APUs), which will “create better value for customers and for both companies,” the firms said. An APU is an onboard engine that is used to primarily start the main engines and power aircraft systems on the ground and, if necessary, in flight.
Boeing and Safran will each hold a 50% stake in the partnership, which will be based in the U.S. The completion of the transaction is subject to customary conditions, including regulatory and antitrust clearance. The deal is expected to close in the second half of the year.
“This strategic partnership will leverage Boeing's deep customer and airplane knowledge along with Safran's experience in designing and producing complex propulsion assemblies to deliver expanded, innovative services solutions to our customers,” said Stan Deal, president and CEO of Boeing Global Services.
Safran currently supplies a wide range of components to Boeing commercial and defense programs, including as a partner to produce CFM's LEAP-1B engine for the B737 MAX programme (through CFM International, a 50/50 JV between Safran Aircraft Engines and GE). Boeing and Safran also are partners in MATIS, a joint venture in Morocco producing wiring products for several airframe and engine companies.
Safran is also a major supplier on the A330neo and other Airbus aircraft programmes.
“This will represent a new step in the long-lasting and fruitful partnership between Safran and Boeing. We are extremely proud of the continued confidence that Boeing has placed in our company. Safran has contributed to prestigious international military and civil programs, providing reliable, high-performance APU systems since 1962. Together we are committed to delivering advanced APUs and world-class support to our customers,” said Philippe Petitcolin, CEO of Safran. “This partnership will have no impact on our 2018 guidance nor on our plan to return Euro 2.3 billion cash to shareholders over 18 to 24 months.”
“This move will strengthen Boeing's vertical capabilities as we continue to expand our services portfolio and make strategic investments that accelerate our growth plans,” said Greg Smith, Boeing CFO and EVP of Enterprise Performance & Strategy. “The establishment of the joint venture will have no impact on Boeing's 2018 guidance or on our commitment to returning approximately 100 percent of free cash flow to shareholders,” Smith added.

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.

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.