The Boeing Company forecasts a market for the Asia-Pacific region of about 8,960 new airplanes worth US$1,130 billion for the 2009 to 2028 period.
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1 Aircraft Maintenance 2010 Update Situated in the heart of Asia, Thailand is gearing up to become a full-service hub and major player in the region s multi-billion dollar aircraft maintenance industry. With Bangkok recently soaring up the list to 15 th in the global rankings measuring the busiest airports in passenger throughput, from an earlier rank of 26 th, and as cargo and passenger volumes continue to accelerate, further investment in aircraft maintenance becomes even more lucrative. There is high potential for growth in the industry because of Thailand s geographic advantage and developed supporting sectors, including electronics and automotive. Asia s economic boom, Thailand s export-driven economy and its ever-increasing popularity as an international tourism and even medical-tourist destination has kept the skies filled with aircraft from every corner of the globe aircraft that need refueling, repairing, maintaining and refitting! The opportunities are as vast as the skyline. The Boeing Company forecasts a market for the Asia-Pacific region of about 8,960 new airplanes worth US$1,130 billion for the 2009 to 2028 period. Travel volumes in the Asia-Pacific overall are large and growing rapidly, and will account for 41% of travel in 20 years, up from around 32% today. In fact, in less than 10 years, the region will easily be the largest air travel market in the world. We chose Thailand for our first production facility outside the U.S. because of the quality of its workforce, favorable laws and central location in Southeast Asia. Joseph C. Berenato, chairman and chief executive officer, Ducommun Incorporated Thailand s Many Strengths GDP rising at an average of 5% per year since 2001, and similar levels of growth projected for the near future. Skilled, educated and motivated workforce: 96% literacy. World-class infrastructure: 7 international airports, 8 deep-sea ports, rail and road lines linking every province, modern telecommunications. Signatory of free trade agreements, including the ASEAN Free Trade Area, granting access to a market valued at US$700 billion, and the Australian Free Trade Agreement. o ASEAN moving to integration by 2015 (ASEAN Economic Community), toward a single market and production base with the free flow of goods, services, investment and capital, and skilled labor. o Intra-ASEAN trade in 2008 was US$453 billion. o ASEAN s global trade for 2008 was US$1.69 trillion. Ranked by the United Nations as the No. 3 location in Asia for FDI and ranked 12 th by the World Bank for ease of doing business.
2 Parameters for Success Thailand has the infrastructure in place for repair services, including overhaul of aircraft engines, and is already a major hub for the electronics and electrical appliance industry, which opens opportunities for cluster development of avionics and communications equipment. Suvarnabhumi International Airport has significantly boosted the growth potential of the aviation industry in the country, with a capacity to service 45 million passengers per year, 3 million tons of cargo and 76 flights per hour. In November 2009, the Airports of Thailand Public Company Limited (AOT) won approval to build a new domestic passenger terminal, which is expected to be completed by 2013 and will boost the Suvarnabhumi airport s capacity to 65 million passengers per year. Don Mueang Airport s reopening for arrivals and departures of domestic flights only increases the opportunities. DMK can serve 60 flights per hour, 11.5 million domestic passengers a year, and 12,490 tons of domestic cargo per year. (Source: AOT) Chiang Mai International Airport has completed a 2 billion baht expansion, and now has an infrastructure that can support its aspiration to become a truly regional aviation hub. The airport can now handle 8 million passengers a year. Phuket International Airport: In December 2009, the government approved a 5.8 billion baht plan to increase the airport s capacity to 12.5 million passengers by This is on top of the recently completed second terminal. Excellent Aircraft Maintenance Infrastructure Thai Airways: Setting the International Standard A founding member of the Star Alliance and a GE-approved CF6 Center for Excellence The THAI Technical Department of Thai Airways International is one of the foremost maintenance centers in Asia. Suvarnabhumi: World s largest maintenance hangars for 3 A380 aircraft Facilities 3 bays for A380-size aircraft Size: length 270m x width 90m x height 45m Maintenance apron 26,100sqm Workshop 5,315sqm GSE 4,833sqm Aircraft spare parts store 19,872sqm Office & building 21,450sqm Capabilities Technical support for small aircraft up to B747, A380
3 Landing gear change Wheel & brake workshop Sheet metal workshop Painting shop NDT shop Welding shop Emergency shop Tools & equipment repair workshop GSE workshop New hangar for A-Check to C-Check MCC to handle all problems of line maintenance U-Thapao facility: The THAI Technical Department s new US$120 million facility at U- Thapao, 125 kilometers southeast of Bangkok, adds 240,000sqm and three bays to the 170,000sqm and six bays already in service at its main facility at Bangkok International Airport. Thai Airways International Public Company Limited s Technical Department recently received the Requalifier Identification Certificate from the U.S. Department of Transportation. This certifies that the quality of THAI s Aircraft Emergency Equipment Maintenance process has achieved the international standard. Thai Aviation Industry: Expertise and Experience AEROTHAI : Aeronautical Radio of Thailand With more than 50 years of experience, AEROTHAI provides air traffic services recognized to international standards. Airports of Thailand Public Company Limited A public company since 30 September 2002, AOT has six international airports under its administration: Don Muang International Airport, Chiang Mai International Airport, Hat Yai International Airport, Phuket International Airport, Chiang Rai International Airport, and Suvarnabhumi International Airport. Civil Aviation Training Center CATC is the specialized Civil Aviation Center of the region, with world-class human resources learning. Thailand an Excellent and Expanding Market Thai Airways International and All Nippon Airways sign an agreement for THAI to conduct heavy maintenance on ANA s Boeing aircraft. (February 2007) THAI s Board of Directors approve 200 new positions to recruit staff for the Heavy Maintenance Department to improve efficiency in aircraft maintenance, along with a US$14.5 million purchase of additional maintenance equipment. (March 2007)
4 The Board of Directors has approved the Aircraft Acquisition Plan for with a budget of 35,484 million baht, in addition to the previous acquisition of five A aircraft that will be in operation in 2010, and six A380 aircraft during Aircraft Parts and Components 2009 Imports and Exports HS Code Description Imports US$ million Exports US$ million Laminated safety glass for vehicles and aircraft Parts of non-powered & powered aircraft Aircraft launching gear and parts; deck arrestors Seats of various kinds used for aircraft Aircraft engines (sparkignition/rotary int. cmbus.) Parts for aircraft engines Insulated wiring sets for vehicles, ships, aircraft Source: Thai Customs Department Blue Ribbon Corporate Members in Thai Aviation Ducommun Incorporated: This California-based manufacturer of assemblies and parts for commercial, military and space aircraft produces 2,000 high-performance and highreliability commercial microwave switches per month. Weston SEA Limited: The company is a world-class manufacturer of complex precision components and sub-assemblies, predominantly for the aerospace market. It has a 35,000sqft facility in Thailand. Primus International Bangkok Co., Ltd: Primus is positioned as a Tier II integrator of composites, metallic parts, and assemblies for the commercial, regional, and business aircraft industries. The company s signature products can be found in high-stress moving systems on high-value aircraft. In Thailand, specialized products include machined parts, composite parts, and assemblies. Driessen Aircraft Interior Systems (Thailand) Ltd: Driessen is a world leader in galley and air cargo equipment for the commercial aviation industry. Specialized products include galleys, galley parts, trolleys, trolley parts, containers, drawers, oven racks, and oven trays.
5 BOI Incentives for the Aircraft Maintenance Industry The aircraft maintenance industry is offered a host of fiscal and non-fiscal incentives and investment services that range from corporate tax exemptions to assistance with work permits and product sourcing. The BOI promotes the manufacture, repair or conversion of aircraft, including aircraft parts and equipment or onboard equipment. These activities are classified as a priority activity of special importance and benefit to the country. Projects in the aircraft maintenance industry are, therefore, eligible for: Exemption of import duties on machinery, regardless of zone An eight-year corporate income tax exemption, regardless of zone, NOT subject to the corporate income tax exemption cap Other rights and benefits shall be granted according to BOI Announcement No.1/2543 dated August 1, 2000
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