Foreign aircraft maintenance investors to be set conditions

Foreign aircraft maintenance investors to be set conditions

Prime Minister Prayut Chan-o-cha, centre, looks at the model of an aircraft maintenance centre planned for Rayong provinces' U-Tapao airport, in France last year. (Government House photo)
Prime Minister Prayut Chan-o-cha, centre, looks at the model of an aircraft maintenance centre planned for Rayong provinces' U-Tapao airport, in France last year. (Government House photo)

A royal decree will be issued to lay down conditions for foreign parties wanting to set up maintenance, repair and overhaul (MRO) operations in Thailand, according to the Civil Aviation Authority of Thailand (CAAT).

CAAT director-general Chula Sukmanop said these conditions will include terms regarding the transfer and import of technology and  micro-investment in MRO businesses.

The decree is being mooted after the Civil Aviation Committee (CAC) invited national carrier Thai Airways International (THAI) to explain its plan to establish a 10-billion-baht MRO centre at U-Tapao airport in Rayong. 

The plan involves investment negotiations with the world's leading aircraft manufacturer Airbus. 

The decree, once it comes into effect, would set clear terms and conditions for MRO investments, according to the CAAT chief. 

The CAAT sees an MRO operation at U-Tapao as presenting ideal economic opportunities for the Eastern Economic Corridor project, the government's flagship policy.

Mr Chula said MRO businesses will create jobs and generate income for the local economy.

He said they have long-term expansion prospects as the aviation sector in Asia is booming with many aircraft being bought, especially in China where air traffic has grown significantly over the years. The aircraft also need regular maintenance. 

Mr Chula said growth in commercial aviation in Asia is expected to continue in the next two to three years. The number of air travellers is on the upswing, as are orders for new planes.

Thailand has the capability to run MRO businesses in terms of available technology and production of spare parts. 

In the future, the door will be opened to US aircraft maker, Boeing, to invest in MRO. The airports in Chiang Rai and Nakhon Ratchasima have a combined free space of over 3,000 rai to accommodate MRO facilities. 

The Board of Investment (BoI) has offered investment privileges such as income tax waivers and tax exemptions on imports of machinery for use in MRO businesses, says the CAAT.

A source at the Transport Ministry said the Asia Pacific accounts for 30% of the world's air traffic volume with 1,900 aircraft deployed by various airlines in the region, expected to grow by another 3,200 aircraft in the next 20 years. 

Mr Chula, meanwhile, said the CAC has approved an amendment to the criteria for issuing licences for commercial flights, other than scheduled passenger services, operated for specific purposes including crop spraying, sightseeing and photography.

He added that more personnel will be trained to make safety inspections of ATR turboprop aircraft following the International Civil Aviation Organisation (ICAO) withdrawal of its red flag early this year after finding Thailand made progress in addressing "significant safety concerns [SSCs]".

ATR plane inspectors are in short supply in Thailand and some have to be hired from a neighbouring country, he said.


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