Written by Neelam Mathews Tuesday, 07 October 2014 06:00
With Thailand’s aerospace industry booming, Neelam Mathews reports on the country’s latest MRO developments
Thailand’s focus on aerospace is fast making it an emerging centre for component manufacture and maintenance
While investors have indicated that they would like the return of an elected government, in July alone, Thailand’s Board of Investment (BOI) approved applications for 15 industrial projects valued at $1.6bn, indicating business was back to normal.
A string of incentives are making investors bullish about moving their business to a country that has already become the third largest in the world in terms of automobile manufacture.
Building the future
Recognising that infrastructure is a basic need, deputy secretary general of the BOI, Ajarin Pattanapanchai, has said that plans for an aerospace industrial park will be announced soon.
The country is looking to encourage Tier 2 and 3 manufacturers of aircraft parts as it works on its ambition to move up the value chain, she explained. Incentives to encourage foreign investment include import duty exemption on machinery and raw materials, double tax allowance for utility bills, permission for foreign companies to own land and 100 per cent repatriation of money.
Maintenance, Repair and Overhaul (MRO) in Thailand is expected to take off, with Boeing estimating that the region’s airlines will need an additional 12,820 aircraft, valued at $1.9tn, over the next 20 years. That represents 36 per cent of the world’s new aircraft deliveries.
Thailand’s aircraft maintenance industry was valued at $637m in 2011 and saw a 20 per cent increase in the following years.
Reflecting Thailand’s growth in aviation, Suvarnabhumi airport transported 50.9 million passengers last year, making it the third busiest airport in ASEAN behind Indonesia’s Soekarno–Hatta and Singapore’s Changi Airport.
A leading light
“This industry is expected to continue growing in the coming years and further accelerate with the launch of the ASEAN Economic Community (AEC) in 2015,” said Wasan Krasair, director of technical support at Thai Airways.
This will expand the market to ASEAN’s 10 member countries, which collectively comprise 600 million people. The AEC will open new doors to manufacturers by transforming ASEAN into a region with a free flow of goods, investment, capital, skilled labour and services.
With a vast network and 110 aircraft, Thailand’s national carrier, Thai Airways, has a large requirement for MRO. It has 30 repair stations and a 190,400sqft facility at Suvarnabhumi airport alone, including 24,300sqm of hangar space that can simultaneously accommodate three extra widebody aircraft, such as the A380 (of which it has ordered six). Capabilities include technical support for narrowbodies, landing gear change, wheel and brake workshops, A and C checks for A380, and line maintenance.
But Thai Airways’ mixed fleet does create problems, including spare parts stocks control, Krasair told . “We cannot stock every part for our aircraft engines.”
Technical skills are often lacking for inflight entertainment as many types of systems are installed in the planes, making it difficult to get all the mechanical skills required. This results in high costs, as it is difficult to stock spare parts for different versions. “The challenge is to keep in step with change,” Krasair explained.
The airline’s 170,000sqm Don Mueang base in Bangkok handles structural, hydro-mechanical, engine, instrument, radio, electronics and avionics overhaul for all A300-600, A310, A330 plus the 737, 747 and 777 series. It has five hangars (six bays) with a full support system for widebody aircraft and 20,000sqm of apron area.
Located 125km south-east of Bangkok, the JAR-145 U-Tapao facility is 240,000sqm and offers heavy maintenance services for both C and D-Checks on three aircraft simultaneously (two widebody aircraft and one small aircraft type). The facilities include a 24,000sqm widebody aircraft maintenance facility (twin hangar) and 43,000sqm for parking.
US-based Triumph Aviation Services Asia (TASA) is the group’s Asia-Pacific aftermarket services headquarters and a single-source service centre for the region. It has capabilities for repair that include full APU diagnostics, test and certification, rotating group balancing, curvic grinding, NDT, piece part machining, paint application, sheet-metal repair and full pneumatic, electric, and fuel accessory repair and testing.
Furthermore, Scandinavian Aircraft Maintenance (SAMTHAI) signed a joint venture with Thai Aviation Industries, which is partially owned by the Thai Air Force, and they plan to develop a civilian MRO facility in Bangkok. It has also signed a contract in co-operation with Geven to supply and install new seats for Thai aircraft.
TASA’s subsidiary, Triumph Structures, is located on a sprawling 14,000sqm facility in the Amata industrial zone near the modern, well-equipped Laem Chabang Port. Triumph manufactures numerous parts and is also a single-source supplier for hinge assemblies to fit composite panels of the A330, the manufacturing of which has shifted from the US to Thailand, Alex Beysen, president of Triumph, told .
Amata is Thailand’s largest listed conglomerate in the industrial estate sector. Among its factories are aerospace plants, which contribute close to 10 per cent of Thailand’s gross domestic product.
Outside of Thailand’s domestic market, there is also wide interest in the country’s aviation industry. For example, leading aviation companies already in Thailand include General Electric Co., Boeing, Michelin, Triumph Group, Chromalloy, Ducommun Incorporated, Aeroworks, Driessen and Minebea.
Rolls-Royce’s sourcing operations in Thailand include three separate supply companies that manufacture parts for the company’s engines before they are shipped to Singapore for assembly.
For example, Senior Plc, formerly known as Weston EU, has facilities in Thailand’s Chonburi Province. There it produces compressor blades, vanes and compressor aerofoils that are used in Rolls-Royce’s V2500 engine.
Primus International, a Tier 2 supplier of engineered metallic and composite parts, supplies composite and metallic propulsion and structural aircraft products for Rolls-Royce. The company has also signed a 10-year contract with existing supplier, Leistritz, to open and operate a manufacturing base in Chonburi in which it will forge compressor blades made of steel, titanium
and nickel-based alloys.
According to Oxford Economics, approximately 393,000 people are employed in Thailand’s aviation sector, but there are efforts to expand that further through eight newly approved training schools. This includes Rolls-Royce’s partnership with Kasetsart University to support aviation education.
Furthermore, Thailand’s BOI recently approved $3.7bn in investment projects, which include an aviation training school of New York-based FlightSafety International.
THAI Flight Training (TFT), a subsidiary of Thai Airways, also trains cockpit crew and cabin crew for all commercial airlines. In addition, the Pan Am International Flight Training Centre (Thailand) will be launched in mid September with an A320 simulator. Its plans for expansion include four simulators–two
A320s and two 737NGs by 2015.
“Thailand is in close proximity to Singapore, where we have a major manufacturing presence. This makes it convenient and efficient for our suppliers to be located in Thailand, where they have further reach into the regional supply chain ecosystem,” said Erin Atan, spokesperson at Rolls-Royce for Asia-Pacific and the Middle East.
“We see Thailand as having good fundamentals for aerospace manufacturing, and we will continue to support the development of an aerospace industrial roadmap for Thailand.”