CP ‘entity’ to build private jet facility

CP ‘entity’ to build private jet facility

Phuket venture likely to be realised quickly

Charoen Pokphand (CP) Group is moving to consolidate a small part of its large business empire — general aviation — in a move seen as fulfilling patriarch Dhanin Chearavanont’s passion for flying.

Dhanin: Said to have a passion for flying

An entity, whose name was not disclosed but is reportedly linked to CP, is investing in a venture that will build a private jet terminal and provide support services to general aviation operators in Phuket.

The venture is expected to be realised quickly, as the entity has won unprecedented support from Airports of Thailand Plc (AoT) to annex its planned facilities to Phuket airport.

That follows the entity’s success in acquiring 17 rai of privately owned land northeast of Phuket airport’s passenger terminal and near an area controlled by the Royal Thai Navy, as the site of its planned facilities, say official and industry sources.

Senior AoT executives, speaking on condition of anonymity, confirmed the state-controlled airport operator agreed to extend Phuket airport’s boundary to cover the proposed private jet terminal and fixed-base operator (FBO) facilities. The term FBO describes the rights granted by an airport authority to an entity to provide aeronautical services such as fuelling, hangaring, tie-down and parking, aircraft rental, aircraft maintenance and other services for corporate and private aircraft.

AoT executives declined to provide details, but said the emergence of the venture linked to Thailand’s richest man had taken the industry very much by surprise.

For one thing, AoT has long maintained there is no nearby land available for a private jet terminal and FBO facilities. And there is no room within airport grounds to accommodate construction of such facilities.

The ongoing 5.75-billion-baht Phuket airport expansion is not factored into such facilities, as this work is aimed solely at coping with skyrocketing commercial airline traffic.

The right to annex Phuket airport facilities is seen as the most crucial part in realising the project, as it would mean allowing access by corporate private aircraft to the airport’s runway, taxiway and other common facilities.

Existing players in general aviation, particularly MJets, Thailand’s first and only FBO and private jet terminal operator, are reportedly dumbfounded by CP’s sudden foray, as Mjets has for years been pursuing in vain the right to set up its own facilities at Phuket airport. That airport is Thailand’s second-largest port of call for corporate and private jets behind Bangkok.

An industry estimate put the initial outlay by the CP-related venture at 200 million baht.

The facilities being planned will reportedly be of a decent size, with enough space to park 30 aeroplanes, thus addressing the most pressing issue now faced by corporate and private aircraft.

Phuket airport’s heavy congestion has deprived business and private aircraft of overnight parking, which has been the primary factor driving away a significant amount of traffic, as these planes’ users want to spend several days on holiday on the island.

Industry analysts say the proposed facilities could generate annual revenue of 120 million baht, recovering its cost in only two years. That scale of business is tiny for CP, considering it achieved US$46 billion in revenue last year and employs 300,000 people.

"Making money is not likely the prime motive of the venture, but rather to respond to the 76-year-old billionaire’s passion for flying, prestige and privacy," one industry executive said.

Mr Dhanin and a few close aides have a fleet of five corporate jets they frequently use, but must rely solely on Mjets’ private terminal and FBO facilities at Bangkok’s old Don Mueang airport. Mjets is partly owned by William Heinecke, chief executive and chairman of the SET-listed Minor International Plc, who also reportedly has a passion for flying.

Since 1991, CP has owned a small subsidiary called Siam Land Flying Co that operates private jet travel and air ambulance services.

Siam Land operates two aircraft: a Hawker 800XP jet and a twin-engine King Air 350 propeller aeroplane.

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