Aviation and Aerospace to Thailand

Trends and opportunities

The market

Thailand is a major aviation hub of Southeast Asia due to its central location and the continued growth of the tourism industry. In 2017, 38 commercial airports served 150 million domestic and international passengers, 1.1 million flights and over 1.5 million tonnes of freight. (Source: Civil Aviation Authority of Thailand, ‘Air Traffic at Domestic Airport 01 January 2017 – 31 December 2017’) Passenger air traffic is expected to grow at an average annual rate of 3.8% over the next 20 years. (Source: IATA 20-year Passenger Forecast, International Air Transport Association (IATA), adjusted in October 2016 and Thailand’s Aerospace Industry brochure, Thailand Board of Investment, 2016).

Aviation is one of the five new industries promoted under Thailand’s economic development plan, the Eastern Economic Corridor (EEC).

The Thai Government announced in 2016 the Aerospace Industrial Estate Development Plan (2016–45) around U-Tapao Rayong – Pattaya International Airport (U-Tapao International Airport) which aims to develop the aviation and aerospace industries, Maintenance Repair and Overhaul (MRO) centres, and training centres which will utilise the total 80 hectares of the naval base and surrounding areas as a part of the EEC.

Market Overview

The Thai commercial aviation industry is expected to grow at an average annual rate of 3.8% to reach 7 billion passengers in 2034. (Source: IATA 20-year Passenger Forecast, International Air Transport Association (IATA), adjusted in October 2016 and Thailand’s Aerospace Industry brochure, Thailand Board of Investment, 2016)

Thailand has 54 civil and military airports, operated by different government agencies and private companies. The six main airports are operated by Airports of Thailand Public Company (AOT), formerly known as the Airports Authority of Thailand, serving 823,574 flights in 2017 (an increase of 6% year-on-year), 129 million passengers (up 8% YOY) and 1.574 million tonnes of freight in 2017. (Source: Airport of Thailand Public Company Limited’s Annual Report 2017)

There is increasing demand in Thailand for aviation and aerospace-related products and services.

The rapid growth of the civil aviation industry generated safety concerns in particular. The International Civil Aviation Organisation (ICAO) listed Thailand as a ‘Red Flag’ country in 2015, pushing the local industry to improve its safety standards.

The Civil Aviation Authority of Thailand (CAAT), aviation companies, education and training providers and airport operators are either conducting their own training programs or looking for partners to improve their safety standards. ICAO removed the ‘Red Flag’ status in 2017, when Thailand’s standards met ICAO’s requirements.

Aviation is one of the five new industries promoted under Thailand’s economic development plan, the Eastern Economic Corridor (EEC). As part of the EEC, Thai Government announced in 2016 the Aerospace Industrial Estate Development Plan (2016–45) or Aerospace Industry Cluster around U-Tapao International Airport.

The Aerospace Industrial Estate Development Plan aims to develop the aviation and aerospace industries, component industry, maintenance repair and overhaul (MRO) centres, and training centres which will utilise the total 80 hectares of the naval base and surrounding areas.

U-Tapao International Airport was selected to become Thailand’s new international airport serving the greater Bangkok region. Feasibility studies and design of the airport is underway. Actual construction of the new runway, new passenger terminal and MRO centres is expected to commence in 2019 and be completed in 2023. (Source: U-Tapao Rayong-Pattaya International Airport’s website and the Eastern Economic Corridor (EEC)’s press release, October 2018)

A high-speed train network project to connect Bangkok’s three major airports, Don Mueang International Airport, Suvarnabhumi International Airport and U-Tapao International Airport was recently announced.

AOT has also announced development projects to increase passenger handling capacity of Suvarnabhumi International Airport, Don Mueang International Airport and Chiang Mai International Airport.

Aerospace Component Industry

The Aerospace Industry Cluster Project is accompanied by investment incentives to support the development of the aviation and aerospace industries, which has attracted the attention of global aviation companies like Airbus, Rolls-Royce, Triumph Structures, Chromalloy, Ducommun Technologies, Driessen, and Senior Aerospace.

Thailand’s Board of Investment (BOI) is targeting the following manufacturing capability

  • Auxiliary Power Units (APUs)
  • in-flight entertainment
  • engine fuel and control
  • landing gear.(Source: Thailand’s Aerospace Industry brochure, Thailand Board of Investment, 2016)

U-Tapao International Airport is to be Thailand’s new aviation hub and where significant aviation component manufacturing and MRO centres will be located.

Maintenance Repair and Overhaul (MRO)

THAI Technical, the MRO division of Thai Airways International is leading the Thai government’s MRO Centre development project at U-Tapao International Airport. Airbus has signed a Memorandum of Understanding with Thai Airways to evaluate the development of a new regional MRO facility. Airbus is looking to use the MRO centre at U-Tapao to support Asian Low-Cost Carriers’ fast-growing demand for maintenance services.

Military Aviation

There are opportunities to provide MRO services and supply spare parts to smaller aircrafts for the Royal Thai Military and other Thai government agencies. The majority of military aircraft in Thailand are aged and require MRO and life extension services. Some Australian MRO providers are already active in the Thai market.

Skills Development

In line with aviation industry growth and the government’s aerospace and aviation industry development plan, the demand for aviation training programs is growing. Currently, there are 26 education and training providers in Thailand offering aviation training programs including seven universities and nine aviation training centres. (Source: Thailand’s Aerospace Industry brochure, Thailand Board of Investment, 2016) In 2015, over 5,000 students enrolled in aviation training courses and this is expected to increase in line with the expansion of the industry.

Opportunities

Increasing demand for aviation and aerospace related products and services offer opportunities for Australian organisations and education providers in the following areas:

  • Airport management and airport safety
  • Consultancy services (147 EASA requirement) including safety standards, technical skills
  • Curriculum and training program development
  • English for aviation industry courses
  • Further aviation courses in specific areas such as avionics
  • Ground services
  • MRO services up to A Check
  • MRO services and spare parts supplies for the military and government-owned aircraft
  • Safety training in accordance with ICAO’s and EASA’s standards
  • Technical and knowledge training program for instructors/ teachers

Marketing your products and services

Market entry

Airline operators normally have contracts with aircraft manufacturers for air frame and aircraft engine repairs. Only the recurring maintenance and regular checks are done by air carriers or their sub-contractors. There are potential opportunities for Australian companies to supply spare parts and provide MRO services to military and government aircraft, and to indirectly provide other services in the market through Original Equipment Manufacturers such as Boeing and Airbus.

To market Australian aviation products, services and training programs into Thailand, licenses and certifications from the European Aviation Safety Authority (EASA) and the Federal Aviation Administration (FAA) are an advantage, as the Thai aviation industry is not as familiar with Australia’s Civil Aviation Safety Authority (CASA) licences and certifications.

The following options should be considered when accessing opportunities in the Thai aviation industry:

  • Establish relationships with existing aircraft and aircraft engine manufacturers
  • Develop partnerships with local MRO centres
  • Appoint a local sole agent/distributor with existing ties to airlines, aviation companies and defence forces
  • Collaborate with aviation training organisations and education institutions in Thailand

Australian exporters should also be familiar with local regulatory environment. The three main regulators of the Thai aviation industry are:

1. Civil Aviation Authority of Thailand (CAAT)

CAAT is an independent agency of the Thai government responsible for prescribing, regulating, safety licensing and auditing of the Thai civil aviation industry endorsed by ICAO. Aviation companies and individuals who wish to work in the Thai aviation industry must be certified by CAAT. Other aviation safety licenses such as European Aviation Safety Agency (EASA), Federal Aviation Administration (FAA) or Civil Aviation Safety Authority (CASA) can be converted to CAAT license but additional examinations are required.

2. Aeronautical Radio of Thailand (AEROTHAI)

Aeronautical Radio of Thailand Ltd (Aerothai) is a Government Enterprise under the Ministry of Transport and Communications which provides air traffic control and aeronautical communication services for airline operations.

3. Civil Aviation Training Centre (CATC)

CATC is a division within the Department of Aviation, Ministry of Transport, responsible for developing a workforce for the Thai aviation industry. CATC is ICAO’s approved training organisation, provides training programs in aircraft maintenance, aircraft services and other aviation-related services.

Austrade provides information and advice that can help you explore the opportunities in Thailand’s aviation and aerospace industries, and offers a range of services including:

  • Tailored market research
  • Introductions to potential partners and customers
  • Visit program arrangement
  • In-market promotional activities

Links and industry contacts

Aeronautical Radio of Thailand Limited

Airports of Thailand Public Company

Civil Aviation Authority of Thailand

Civil Aviation Training Centre of Thailand

Ministry of Education

Ministry of Transport

Ministry of Foreign Affairs

Office of the Board of Investment

Royal Thai Customs Department

Royal Thai Air Force

Stock Exchange of Thailand

Thai Airways Internationalwww.thaiairways.com

Tourism Authority of Thailand

 

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