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Aviation industry: Relaxation of 51% Thai ownership rule

Aircraft assembly line (Source: YouTube screen capture); Inset: Map of Eastern Economic Corridor; U-Tapao airport which already has aircraft maintenance operations.

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In a first, laws that restrict foreign investment in Thailand dating back to 1954 to be reversed. Civil Aviation Board will now set limit.

AVIATION  INDUSTRY & FOREIGN INVESTMENT

Aviation industry: Relaxation of 51% Thai ownership rule

22/02/2017
Chatrudee Theparat

The cabinet yesterday approved a new bill on civil aviation that authorises the Civil Aviation Board (CAB) to decide the proportion of foreign ownership in Thailand's aviation business.

The move is aimed at enhancing Thailand aviation industry to become an aviation hub in Southeast Asia and enhancing Thailand's capacity to become an aircraft maintenance centre.

An enhanced Thai aviation industry would also likely put an end to the continual challenge posed to Thailand's airline industry by international civil aviation regulators and their safety inspections over the last two years.

FIRST LAW TO END LONGSTANDING RESTRICTIONS ON FOREIGN INVESTMENT IN THAILAND

The new law puts an end to long existing restrictions on foreign investment in Thailand.

This type of investment is also known as foreign direct investment (FDI) as opposed to portfolio investment made indirectly through the country's stock exchange and bond markets. 

The bill amends the Civil Aviation Law of 1954 and revokes the announcement of revolutionary article No 58 (1972).

The U-tapao tarmac was packed with planes during the protests that took over Suvarnabhumi Airport. The airport has been expanded and plans for an aircraft maintenance facility were made.

OBSTACLE TO DEVELOPMENT OF THAI AVIATION: 51% THAI OWNERSHIP RESTRICTION

Existing law requires Thai owners to control 51% of aviation companies and shareholders must be individuals, prohibiting investment by investment funds.

This old law is considered an obstacle to the development of the Thai aviation industry.

This is according to Kobsak Phutrakul, assistant minister to the Prime Minister's Office.

MAJOR INVESTMENT IN 2015 APPARENTLY FELL THROUGH

THAI Airways International has a repair centre at U-Tapao airport (see photo below).

In 2015 a major foreign investment in Thailand's aviation industry looked to be imminent but ultimately did not happen. The news release at the time read: 

"Chiang Rai will get a more prominent spot in Thailand's aviation industry when a joint venture led by Singapore's ST Aerospace establishes a major aircraft maintenance, repair and overhaul service centre (MRO) there. The partnership with Seri Sapphakit Co, a Bangkok-based trading company, is seeking Airports of Thailand (AoT) approval to build a facility that will initially cost 800 million baht, with later plans for a pilot training school and flight simulator centre. The land lease would be for 30 years and development conducted on the basis of "BTO" public-private partnership, standing for build, transfer and operate" (see here).

Photo taken during Prime Minister Prayut Cha-o-cha's tour of a THAI Airways International repair centre at U-Tapao airport as he inspects construction of the new terminal, which emphasises the commercial development of the airport.

EASTERN ECONOMIC CORRIDOR (EEC) INVESTORS WAITING

The government is keen to promote the aviation industry in the Eastern Economic Corridor (EEC), while many foreign companies such as Airbus are keen to invest in the government's new investment location.

The planned EEC, spanning Chon Buri, Rayong and Chachoengsao provinces, has been designated for development as a high-tech industry cluster, with an eye towards becoming Asean's leading economic zone for industrial, infrastructure and urban development.

The corridor will also rely on developments in transport infrastructure.

AMBITIOUS PLANS FOR EASTERN ECONOMIC CORRIDOR

The EEC is set to become an Asean water transport hub, linking the Dawei deep-sea port in Myanmar with Sihanoukville in Cambodia and Vung Tau port in Vietnam.

Investors in the EEC will receive privileges, including land leases for 50 years and extensions of 49 years, visa-free grants for the import of skilled labour or executives, and special tax perks.

It is estimated that the economic corridor program will help generate new investment value of up to 1.5 trillion baht within five years, from both the government and the private sector.

PROPORTION OF FOREIGN INVESTMENT: CIVIL AVIATION BOARD TO HAVE FULL AUTHORITY

The new law governing EEC development is set to come into force between the middle of the year and September.

Mr Kobsak said the new amendment allows the board to have full authority in setting the proportion of foreign investment.

The board will be chaired by the transport minister.

http://www.bangkokpost.com/business/tourism-and-transport/1202545/new-bill-on-foreign-quota-for-aviation

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Vocabulary:

according to (prep): as stated or reported by somebody/something - ตามคำบอกเล่า, ตามรายงาน

amend : to make changes to a document, law, agreement, etc. especially in order to improve it - แก้ไข

amendment : a change made to a law or agreement, in this case, to the constitution - การแก้ไขกฎหมาย ในที่นี้หมายถึงการแก้ไขรัฐธรรมนูญ

announcement : a spoken or written statement that informs people about something - การประกาศ

approve : to give official permission - อนุมัต

as opposed to : different from - แตกต่างจาก

authorise : to give official permission for something, or to give someone official permission to do something - ให้อำนาจ, มอบอำนาจ, ให้สิทธิ

authority : the power to make decisions or tell people what to do - อำนาจ, อำนาจในการสั่งการ

aviation : the flying of aircraft - การบิน

bill : a proposal for a law - ร่างกฎหมาย

bill : a written document containing a proposal for a new law - ญัตติ

board : a group of people who have the responsibility of managing important business or government activities - คณะกรรมการ

bond (noun): a way that companies and the government borrow money from many people each of which owns one or more "bonds" which are usually traded on securities exchanges - พันธบัตร

cabinet : the group of government ministers who make and approve government policy - คณะรัฐมนตรี

chair : to be the person in charge of a meeting, committee, or company - ดำรงตำแหน่งประธาน, ทำหน้าที่ในฐานะประธาน

challenge : something that needs a lot of skill, energy, and determination to deal with or achieve - สิ่งที่ท้าทาย, การท้าทาย

civil aviation : non-military aviation - การบินพลเรือน

cluster : group of people, animals or things close together - กลุ่ม

come into force (verb): to take effect; to begin to be used or required - ส่งผล

consider : to regard as; to think of as - ถือว่า

continual (adj): continuing without interruption; continuous - ต่อเนื่อง

control (noun): control and authority over a situation or a group of people - อำนาจบังคับบัญชา, ตำแหน่งบัญชาการ

corridor (noun): a long narrow area along which something travels - เส้นทาง, ระเบียง,เฉลียง

deep-sea port : a very deep port where big ships can park and load and unload goods -

designated : formally chosen - แต่งตั้ง

development : the gradual growth of something so that it becomes more advanced, stronger, etc - การพัฒนา

enhance : to improve the quality, amount or strength of something - ปรับปรุง, ทำให้ดีขึ้น

establish : to start a company or organization that will likely continue for a long time - สถาปนา, ก่อตั้ง, จัดตั้ง

executive : a senior manager in a business or other organisation - ผู้บริหาร

existing (adj): present now; in use now; used now - ที่มีอยู่

extension : making a period of time longer - การขยายออกไป

foreign direct investment (noun): FDI, money that people or companies of one country invest in another country by buying property, building factories, buying businesses, etc -

fund (noun): investment fund, money collected together to invest in companies or projects -

generate : to produce - ก่อให้เกิด

grant : to officially give something - ให้

hub : the central and most important part of a particular place or activity - จุดศูนย์กลาง, จุดรวม

imminent : happening soon - ที่จะเกิดขึ้่นเร็วๆนี้

indirectly (adv): not as the main aim, cause or result of something, but in addition to it; not in a direct line or manner - โดยทางอ้อม

individuals : persons - บุคคล

industrial : relating to industry - เกี่ยวกับอุตสาหกรรม

infrastructure : a set of systems within a place or organisation that affect how well it operates, e.g., the telephone and transport systems in a country or the system of train tracks that a railway uses - สาธารณูปโภค

inspection : an official process of checking that things are in the correct condition or that people are doing what they should - การตรวจสอบตรวจตรา

international : connected with or involving two or more countries - นานาชาติ, สากล, ระหว่างประเทศ

invest : to spend money on something in order to make it better or more successful - ลงทุน

investment (noun): the act of investing money in something - การลงทุน

joint venture : a business activity carried out by two or more companies or groups - การลงทุนร่วม

keen : very interested in an activity - สนใจอย่างยิ่ง

leading (adjective): among the first and most important in a group - ชั้นหนึ่ง, ชั้นแนวหน้า, ชั้นนำ

lease : a legal agreement in which you pay money in order to use a building, piece of land, vehicle, etc. for a period of time - สัญญาเช่า

maintenance : the act of keeping something in good condition by checking or repairing it regularly - การซ่อมบำรุง

obstacle : a difficulty or problem that prevents you from achieving something - อุปสรรค ขวากหนาม

ownership (noun): the condition or state of owning things, having things that you "own", that belong to you, that you are the "owner" of - สิทธิการครอบครอง, ความเป็นเจ้าของ

perk : a benefit or advantage that you get from a situation - ผลประโยชน์เพิ่มเติม, ผลตอบแทนเพิ่ม

port : an area of water where ships stop, including the buildings around it - ท่าเรือ

portfolio (noun): a set of investments owned by a company, person or organization - หลักทรัพย์การลงทุน, หลักทรัพย์ในครอบครอง, กลุ่มหลักทรัพย์; หลักทรัพย์ทั้งหมด ในความครอบครองของ ผู้ลงทุนรายใดรายหนึ่ง

pose : cause something, especially a problem or difficulty - เป็นเหตุให้

private sector : businesses and industries that are not owned or controlled by the government - ภาคเอกชน

privilege : a special benefit that is available only to a particular person or group - เอกสิทธิ์

prohibit : to not allow; to ban - ห้าม

promote : to encourage or support something - สนับสนุน

proportion : part or share of a whole - สัดส่วน

proportion : part or share of a whole - สัดส่วน

province : one of many divisions of the government of a country into smaller parts - จังหวัด

regulator : an official (or organisation) who makes certain that the companies who operate a system work effectively and fairly - ผู้มีอำนาจควบคุม

release : making known to the public - การเปิดเผย, การปล่อย

repair : to fix something that is broken or damaged - ซ่อมบำรุง

restriction : a rule, action or situation that limits or controls someone or something - การจำกัด, การควบคุม

revoke : to officially say that something is no longer legal - เพิกถอน

set to : ready to do something - พร้อม

shareholder : a person who owns some of the equal parts into which the ownership of a company is divided - ผู้ถือหุ้น

skilled : having enough ability, experience and knowledge to be able to do something well - มีทักษะ,

stock exchange : a place where shares in companies are bought and sold; all of the business activity involved in doing this - ตลาดหลักทรัพย์

transport : moving people or things from one place to another - การขนส่ง

Transport Minister (noun): The government minister who heads the Ministry of Transport - รัฐมนตรีว่าการกระทรวงคมนาคม

ultimately : finally, after a series of things have happened - ท้ายที่สุด, ตอนสุดท้าย, ในที่สุด

urban : connected with towns and cities - เขตเมือง

value : how much something is worth in money or other goods for which it can be exchanged - มูลค่า

with an eye towards : planning to do something -

zone : an area that has an important or typical feature; an area where a particular activity is allowed or not allowed - พื้นที่, บริเวณ, เขต

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