AEROSPACE - Thailand Board Of Investment
AEROSPACEINDUSTRY -TAKING OFFTO NEW HEIGHTS
2Content0407Aerospace IndustryOverviewGrowing Tourism Sector0814Sound InfrastructureAviation Training CentersApproved by CAAT1620Aircraft IndustryAirline Business2327Maintenance, Repairand Overhaul (MRO)Unmanned Aerial Vehicle(UAV)2829Supporting Policy andOrganizationsBOI Incentives
Aerospace Industry OverviewAerospace Industry Overview45AerospaceIndustryOverviewMarket Share of Air Travel byRegion’s Carriers in 201712426%%EuropeNorthAmericaWith air travel becoming faster, more accessible, andmore comfortable, the aerospace industry has witnesseda huge spike in the number of people travelling bothdomestically and abroad.By 2036 it is estimated that there will be approximately7.8Billionpassengers per year- almost double today’s figureof 4 billion travelers.This huge spike in demand willresult in significant economicopportunities for countries acrossthe globe, not least those in theAsia Pacific. According to the 2017IATA 20 Year Passenger Forecast,the Asia Pacific region will contributemore than half of new passengersbetween 2017 and 2036, primarilydriven by booming passengernumbers from China, India andIndonesia. This represents anaverage growth rate of 4.6% peryear.To fully capitalize on these projections,governments, aviation experts andother private sector stakeholders arecontinuing to forge partnerships inareas including infrastructure, tradeliberalization and reduction of barriersto freedom of movement.572%%Middle East35%%AfricaLatinAmericaAsia PacificTop 5 Growing Markets in Term ofAnnual Additional urkey0.1200.10.20.30.40.50.60.70.80.91Unit: Billions of PassengersSource: 1, 2The International Air Transport Association
An Ideal Location forAerospace Hub6Growing Tourism Sector7An IdealLocation forAerospace HubAdvantageously located in theheart of South East Asia, Thailandhas long been a center of commercialaviation in the region. With a strongdomestic economy and thrivingtourism sector, it is no wonderthat the country has seen a rise inpassenger numbers over the pastdecade.On average, Thailand’s air traffichas increased three times faster thanthe global market1. It is projectedthat, during 2018-2028, the numberof passengers will increase at 5.6%per year, while the growth ratein the shorter term (2018-2022)is even more impressive at 7.5%per year2.Thailand’s Passengers andFlight 063104127141155160GrowingTourism SectorIn 2018, more than 35 milliontourists visited Thailand. The vastmajority of Thailand’s tourist arrivalsoriginated from Asia; however, therewere also a substantial number ofarrivals from countries in other regionsincluding Russia, the Untied States,the United Kingdom and Germany.When assessing the drivers behindInternational TouristThailand’s burgeoning tourismsector, one can primarily attributeArrivals to Thailand1their success to two core factors.Firstly, the growth of low-costairline carriers has significantlyincreased the affordability of airtravel and opened the market toa wider range of individuals.OthersCoupled with a robust andrelatively well-developedChinatourism sector, Thailandhas all it takes to be atourist friendly country, withgood accommodation andMalaysia9.48%technology. According tostatistics from the WorldKoreaTravel and Tourism Council,USA4.83%the total contribution of2.98%travel & tourism to GDPLaosRussia3.80%4.56%JapanIndiawas 28.6% of Thailand’s3.99% 4.36%gross domestic product 018Passengers Movement - Unit: Million PassengersFlight Movement - Unit: Thousand FlightsSource: 1The International Air Transport Associationand 2, 3The Civil Aviation Authority of ThailandUnited Kingdom2.81%27.71%Singapore2.91%Source: 1Ministry of Tourism & Sports
Sound tureThere are currently a total of 38 commercial airports operatingacross Thailand, 12 of which operate short and long haulinternational services. In 2017, Thailand’s airports handled atotal of 833,084 flights, a significant boost from previous years.12have been operated under three main organizations:Department of AirportsBangkok Airways Public Company LimitedAirport of Thailand Public Company Limitedinternational airports covering all key destinationsin : The Civil Aviation Authority of Thailand
Sound InfrastructureSound Infrastructure1011Airports in Thailand have the capacity to accommodate a huge numberof passengers. Suvarnabhumi International Airport sees an average ofnearly 70 flights flowing in and out per hour. Several other airports acrossthe country accommodate more than 10 fights per hour. To support theincreased capacity demands that are primarily resultant from the gradualgrowth of international visitors, airports across Thailand are investingsignificant financial and human resources into improving their operations.70Flightsflowing in and out SuvarnabhumiInternational Airport per hourArrival8,280 Passengers/HourDeparture6,660 Passengers/HourSuvarnabhumiAircraft Flow68 Flights/HourArrival785 Passengers/HourChiang RaiDon MueangDeparture1,939 Passengers/HourArrivalAircraft Flow7,900 Passengers/Hour11 Flights/HourDeparture7,190 Passengers/HourAircraft Flow46 Flights/HourArrival1,200 Passengers/HourDeparture1,000 Passengers/HourArrivalAircraft Flow3,600 Passengers/HourDeparture3,600 Passengers/HourHat Yai12 Flights/HourPhuketAircraft Flow20 Flights/HourArrival1,000 Passengers/HourU-TapaoArrival1,860 Passengers/HourChiang MaiDepartureDeparture1,000 Passengers/HourAircraft Flow15 Flights/Hour2,690 Passengers/HourAircraft Flow24 Flights/HourSource: The Civil Aviation Authority of Thailand
Human Resource Developmentfor the Aerospace IndustrySound Infrastructure12: Expansion ofU-Tapao andDevelopment ofRail LinksBangkokNDon MuangAirportBang SueSuvarnabhumiAirportMakkasanChachoengsaoChon BuriSrirachaLaem ChabangPortPattayaJuk SametPortRayongU-TapaoAirportMap Ta PhutEECa areaSource: Eastern Economic Corridor OfficeDespite the already strong capacityof Thailand’s airports, furtherimprovements are on the way.Upgrades to Don Mueang andSuvarnabhumi International Airportare currently in progress, whileU-Tapao International Airport willalso increase its capacity with theaddition of a second runway andthe redesign of its airport space.The Thai government has alsocommitted 224.54 billion bahttowards the construction of theHigh-Speed Rail Linked 3 AirportProject. Connecting Don Mueang,Suvarnabhumi and U-Tapao Airports,the completed project will covera total distance of more than 220kilometers. Due to be officiallylaunched and open to the pubicin 2025, it is expected that theproject will contribute to theprogress of the Eastern EconomicCorridor of Aerotropolis (EECa).Also known as the Eastern AirportCity, the EECa is an airport-centereddevelopment area covering 6,000rai in Rayong and Chonburi provincesand incorporating a re-developedU-Tapao airport as well as otherfacilities such as air cargo and acommercial gateway.13Human ResourceDevelopment forthe AerospaceIndustryAs demand within the aerospaceindustry increases over the nextfew decades, it is expected thatthe workforce in this industryin Thailand will also continue togrow. The Civil Aviation Authorityof Thailand (CAAT) forecasts thatthe workforce will rise from 15.9thousand persons in 2017 to 20.8and 29.4 thousand persons in2027 and 2037, respectively.In meeting such increasing demandfor skilled personnel, many universitiesand institutions have initiatedacademic programs aimed atfurnishing the country’s humanresources with the relevant skillsets. In 2017, 33,857 engineeringstudents graduated in Thailand,with a further 23,873 science andtechnology students also graduating.In the same year, 2,512 graduateswere from the fields of aviation andaviation management1.A number of leading universities offerspecific courses in aerospace maintenanceThese include:Chulalongkorn UniversityThammasat UniversityKasetsart UniversityKing Mongkut’s Universityof TechnologyRangsit UniversityAssumption UniversityRajamangala University ofTechnology KrungthepSource: 1Office of the Higher Education Commission
14Aviation Training CentersApproved by CAATAviation Training CentersApproved by CAATAviationTraining CentersApproved byCAATOther than institutions with academicprograms, various types of aviationtraining centers approved by CAATare also operating across the country.Currently, CAAT certifies 6 types oforganizations and devices includingFlying Training Organizations (FTO),15As for the FTO, there are13centersfor pilot training approved by CAAT.The Bangkok-based centers areCivil Aviation Training CenterBangkok Aviation Center Co., LTDRoyal Sky Aviation Center Flying SchoolThai Flight Training Co., Ltd.Asia Aviation And Technology Co., Ltd.Thai Inter Flying Co., LTD.Air Traffic Control Training Organizations(ATCTO), Aviation Language TestingService Providers (TSP), Air TrafficControl Synthetic Training Devices(STD), Aircraft Maintenance EngineerTraining Organizations (AME), andFlight Synthetic Testing Devices (FSTD).Premium Airlines Co., LTD.Other centers include:International Aviation CollegeNakhon Phanom UniversityThai General AviationTechnology SchoolSriracha Aviation Co.,Ltd.D-0507 Flight TrainingCompany LimitedAFA Aeronautical Co., LTDThai Aviation Co., LTDSource: Civil Aviation Authority of Thailand
Aircraft Industry1617AircraftIndustry: Thailand’sSignificantPotentialThailand’s future in this sectoris clear for all to see. With theexpansion of U-Tapao InternationalAirport as part of the EECadevelopment; the airplane purchaseorders made by low-cost carriers; andthe emergence of the Maintenance,Repair, and Overhaul (MRO) sector,it can be expected the furtherinfrastructure improvements requiredto accommodate the production ofaircraft parts and aircraft-relatedproducts will be forthcoming.Recognizing the sector’s significantpotential, many key internationalaircraft manufacturing companieshave already invested in Thailand.These include Ducommun, Leistritz,Michelin, Revima, Senior Aerospace,Triumph Structures (Thailand), andZodiac Aerospace.Thailand is also a hub of auto partsproduction, an industry whose relevantskills and technologies can be utilizedto produce aircraft-related products.This provides Thailand with a wealthof expertise in Tier 3 componentmanufacturing and Tier 4 compositemanufacturing for original partsmanufacturing (OEMs).Example of Key Players
Aircraft IndustryAircraft Industry1819: Trade ofAircraft-relatedProductsIndicating the strong potential ofits aircraft industry, Thailand hasreported a positive trend in thetrade of aircraft-related productsover the past decade. In thisrespect, the country has recordedoverall growth in both its importand export numbers. Importsin particular have undergone aperiod of strong growth, with aTop5Imported Products in 2018Aeroplanes and other powered aircraftof an unladen weight 15000 kgCAGR of 21.73% between 2010and 2018. Thailand’s imports ofaircraft-related products hit a valueof 5.82 billion in 2017. While exportsperformed less spectacularly overthe same period, with a CAGR of6.89%, there was a strong upwardtrend from 2015 to 2018, indicatinga promising future for this area oftrade.Turbojets of a thrust 25 kNAeroplanes and other powered aircraftof an unladen weight 2000 kgSpark-ignition reciprocating or rotary internalcombustion piston engineIgnition wiring sets and other wiring setsfor vehicles, aircraft or shipsImport and Exportof Aircraft related ,7475Exported Products in 2018Spark-ignition reciprocating or rotary internalcombustion piston GR Growth 2010-2018 21.73%Unit: Million n wiring sets and other wiring setsfor vehicles, aircraft or ships3,184Parts of aeroplanes or helicopters, n.e.s.(excluding those for gliders)201020112012CAGR Growth 2010-2018 6.89%201320142015201620172018ExportUnit: Million USDSource: International Trade CentreAeroplanes and other powered aircraftof an of an unladen weight 15000 kgNew pneumatic tyres, of rubber,of a kind used for aircraftSource: International Trade Centre
Airline Business2021: Strong andConsistentGrowthAcross the globe, the airline industry remains characterized by stronggrowth, primarily due to the continued increase in air travelers in both thedomestic and international travel markets. Similarly, in 2018 the airportbusiness in Thailand also continued to see a steady rise in the numberof outbound travelers, and the continued expansion and popularity oflow-cost carriers.Example of Airlines Operating in ThailandDomistic RoutesInternational RoutesAirlineBusinessSource: The Civil Aviation Authority in Thailand
Airline Business2223: Demand inDomestic MarketA significant amount of growthwithin the Thai market remains drivenby the domestic demand for lowcost carriers. At present, low costairlines now account for more than70% of the domestic market share.Interestingly, Thailand’s internationalmarket has also experienced rapidgrowth as a result of low costcarriers. In 2017, they accounted forapproximately 13.5 million internationalseats, an increase of more than 8million in just over five years.Maintenance,Repair andOverhaul(MRO)Thailand’s Fleet 0132014Unit: Number of Aircraft in Service2015201620172018Low Cost AirlinesOverall AirlinesSource: Center of Aviation as of April 2018While Thailand has historicallyoperated a relatively limitedMRO sector, this is changing.In its Commercial MarketOutlook 2018, Boeing predictedthat aircraft fleets in theAsia-Pacific would almosttriple from the 6,000 aircraftcurrently based in the regionto approximately 17,000 by2036. Such growth wouldmake the Asia-Pacific theworld’s largest market andlead to the center of the MROindustry shifting from North Americaand Europe to the Asia-Pacificregion. With the region leading theway in the aerospace industry’sseemingly insatiable global growthand the significant opportunitythis presents for regional MROservices, Thailand is in a strongposition to build on its existingimportance as an aviation hub andestablish itself as regional centerfor MRO services.
24Maintenance, Repair andOverhaul (MRO): GrowthOpportunitiesExample of MRO CompaniesOperating in ThailandAirbus is an international pioneer in the aerospaceindustry. This company is a leader in designing,manufacturing and delivering aerospace products,services and solutions to customers on a globalscale.Maintenance, Repair andOverhaul (MRO)25: Developmentin U-TapaoAirportAn important factor contributing to the prospects of the MRO sectorin Thailand is the development plan of the Eastern Economic Corridorof Aerotropolis (EECa) which features the expansion of U-TapaoInternational Airport. This will provide excellent opportunities for a rangeof related companies.Important components of the development plan include:Passenger Terminal 3 and Commercial GatewayAir Cargo FacilitiesMaintenance, Repair and Overhaul (MRO) FacilitiesAviation Training FacilitiesChromalloy is an integrated solutions provider —for original equipment manufacturers, commercialairlines, militaries, oil and gas companies, and powercompanies — that delivers innovative solutionsdesigned to reduce manufacturing and operatingexpenses and extend the life of gas turbineengines.Triumph Aviation Services Asia, Ltd. providesrepairs and overhauls complex aircraft operationalcomponents in Thailand and acts as aSingle-Source Service Center for all commercialaviation across the region. The company wasfounded in 2005 and is based in Chonburi.TurbineAero is an independent aerospacecomponent maintenance, repair, and overhaulservice provider focused on APUs and relatedproducts. It provides military, commercial, andregional airline customers with a comprehensivemaintenance solution for legacy and new APUengine models.Free Trade ZoneA new passenger terminal and runway will boost passenger numbers atU-Tapao to 15 million per year within the next five years.Expected MRO Value in the it: Million USDThailand Insourced MRO as usualThailand Insourced MRO with U-Tapao ProjectSource: Prachachart and Aviation Week Database, Frost & Sullivan
26Maintenance, Repair andOverhaul (MRO)In June 2018, Thai AirwaysInternational and Airbus signedan MOU to establish an MRO facilityat U-Tapao International Airport.It is expected this facility will be oneUnmanned Aerial Vehicle (UAV)27of the most modern and extensiveservice centers in the Asia-Pacificregion, offering heavy maintenanceand line services for all wide-bodyaircraft types.Thai Airways-Airbus CoordinationMRO Center EstablishmentUnmannedAerial Vehicle(UAV)Unmanned Aerial Vehicles (UAV),commonly known as drones, haveundergone a significant growthin popularity worldwide over thepast few years. Thailand is noexception. The drone market inThailand has grown enormously,as can be observed from theincrease in the number of registereddrones in the country. The figuresurged from 109 units in 2016to 949 units in 2017, beforeskyrocketingto and 7,708 in 2018.Technician Training SchoolTotal Number of Registered DronesAircraft Composite Repair Shop1099497,708201620172018Technology Support for Smart HangarParts Store and Logistic CenterDesign for Building and ConstructionEquipment Maintenance OfficeExpected Finished Period in 2021The increase in the popularity of drones is mainly attributed to thesharp fall in prices. As is the case with other technologies, it is likely thathigh-quality drones will become more affordable in the years to come,and this indicates a continued growth for the foreseeable future.According to SZ DJI Technology,a Chinese drone maker, Thailandis among the top-five markets interm of consumer enthusiasm fordrone technology. With tech-savvyconsumers who love to takepictures and a large number ofsmall farmers who can utilizedrones to spray fertilizers orpesticides, Thailand offers a largepotential market for drone makersand distributors.
Supporting Policy and OrganizationsBOI Incentives2829SupportingPolicy andOrganizationsIn an effort to support the development and growth of Thailand’saerospace industry over the short and medium term, the relevantgovernment agencies embark on a series of policy reforms. Some broadpolicy initiatives include increased assistance to domestic companies;undertaking comprehensive research & technology development;developing new industry talents; and fully implementing aerospacestandards and certification programs.Supporting OrganizationsBOIIncentivesBOI offers a wide range of tax and non-taxincentives for eligible activities.GroupCivil Aviation Authority of Thailand (CAAT)the CAAT is mandated with the enforcement oflaws on air navigation, the negotiation of air serviceagreements with international civil aviation organizations,and the promotion of Thailand’s aviation industry.A1Exemptionof ImportDuty *Manufacture of aerospace devicesand equipment such as devicesor equipment related to rockets/spacecraft/space vehicles/propulsionunits and auxiliary equipment, etc.8 years CITexemption(no cap)Aerospace operating systems suchas search, detection, navigation,guidance, aeronautical, nautical systemsand instruments, etc.A2Repair of aircraft or aircraft partsA3Manufacture of onboard devices andequipment (except disposable andreusable aircraft utilities and supplies)such as seats, life vests, trolley, galley,etc.8 years CITexemption5 years CITexemptionAircraft or Aerospace Industrial Zoneor Industrial EstateA4Airports of Thailand Public Co., Ltd. (AOT)manages Thailand’s six international airports.TaxIncentivesManufacture of aircraft or aircraftparts such as airframe, critical parts(e.g. engine and parts, propeller),appliance (e.g. flight recorder, radar),equipment and other componentsMinistry of Transporthas overall responsibility for transportation, trafficplanning, and transport infrastructure development.Department of Airports (DOA)operating under the Ministry of Transport, the DOAis in charge of the operation of airports belonging tothe government.ActivitiesNotes :Repair of onboard devices andequipment (except disposable andreusable aircraft utilities and supplies)3 years CITexemption*Exemption of import duty on manchinery and raw materials used inproduction of export products
BOI Incentives3031Incentives for Investment in theEastern Economic Corridor (EEC)The BOI also recognizes theimportance of investment in relevantactivities in targeted locations.It has therefore been providingadditional incentives for investmentin the EEC. The promoted zone forspecific industries related to aerospaceis the Economic Corridor ofAerotropolis(EECa).Eligibleactivities located in one of the21 promoted zones for targetedindustries or other industrialestates / industrial parks in theEEC may also receive additionalincentives, on top of the basicpackage granted by the BOI.Incentives for Investment in the EECaEligible ActivitiesAdditional IncentivesManufacture of aircraft or aircraft parts such asairframe, critical parts, appliance, equipment andother componentsRepair of aircraft or aircraft partsManufacture of aerospace devices and equipmentsuch as devices or equipment related to rockets/spacecraft/ space vehicles/propulsion units andauxiliary equipment, etc.4 yearsof CITexemptionAerospace operating systems such as search,detection, navigation, guidance, aeronautical,nautical systems and instruments, etc.Manufacture of onboard devices and equipment(except disposable and reusable aircraft utilities andsupplies) such as seats, life vests, trolley, galley, etc.2 years of CITexemption and a 5-year50% CIT reductionApplications for incentives under the EEC scheme must be submittedby 30 December 2019. In addition, investment projects under the schememust establish a collaboration with education or research institutions informs such as Co-operative Education (CoE), Dual Vocational Training(DVI), Work Integrated Learning (WiL), or a similar cooperation, underthe condition that the number of students participating in thecollaborative program is at least 10% of the project employees or 50people, whichever is lower.
32THAILAND BOARD OF INVESTMENT555 Vibhavadi-Rangsit Road, Chatuchak, Bangkok 10900, ThailandTel : ( 66) 2553 8111 Fax : ( 66) 2553 8315Website: http://www.boi.go.thE-Mail : head@boi.go.th
Aerospace Industry Overview Aerospace Industry Overview 7.8 Billion. 6 7 An Ideal Location for Aerospace Hub Growing Tourism Sector Advantageously located in the . trend from 2015 to 2018, indicating a promising future for
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Aerospace Retirees’ Club (- Name of Board Member -) P.O. Box 2194 El Segundo, CA 90245 Call the ARC voicemail: 310-336-5454, Box 12582 NOTICE The expressions of opinion in the Aerospace Retirees’ Club Newsletter are the opinions of the writers and not necessarily those of the Aerospace Retirees’ Club or The Aerospace Corporation.
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