aerospace industry - thailand automotive institute · 2018-08-14 · value chain of aviation...

THAILAND

BOARD OF

INVESTMENT

Aerospace

Industry

THAILAND An Asian Hub,

a World of Opportunity

Mr. Vorachart Choochom

Section Director

Automobile & Aerospace Industries

Value Chain of Aviation industry

• Engine

• Navigation

system

• Electronic

• Communication

equipment in space

1st Tier

Parts/ Equipment manufacturer Software

Space

industry

Transportation

airport

Unmanned

Aerial Vehicle

Industry

Related to Space

Explore/navigation

Geo-informatics

Machines and

equipment used

within aircraft

MRO

Supporting Industry

Machine tools, measuring

instruments /Testing

Service

Industry

• Transportation

logistics

• Aviation

Training

Center

2nd Tier

• Aviation

part

• Apparatus

• Electronic

• Propeller

2

3rd Tier

• Gear,

Screw, bolt

• Structure

• Cable

• Electrical

wire

Raw material

• Titanium

• Plastic

Composite

• Advanced

Fiber/

Fabric

Temperature

durability tester

Electromagnetic

interference

Gauge machine

41%

19%

17%

12%

6%

3% 2%

Asia

Europe

North America

Middle East

Latin America

Africa

C.I.S

2,500

1,110

1,040

730

350

180

140

World Commercial Aircraft

Value of Commercial Aircraft

to be Delivered (2017-2036)

USD

6,050

Billion

Source: Boeing

Volume of Expected Commercial

Aircraft Deliveries (2017-2036)

39%

21%

19%

8%

7%

3% 3%

Asia

North America

Europe

Middle East

Latin America

C.I.S

Africa

16,050

8,640

7,530

3,350

3,010

1,230

1,220

41,030

deliveries

4,710 5,470

5,850 6,350

6,830

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2012 2013 2014 2015 2016

9.74%*

4

World Commercial Aircraft

Number of Total

Commercial Fleet in Asia By 2026

Note: *Compound Annual Growth Rate 2012-2016

Source: Boeing, ICF International

Aircraft maintenance,

repair and overhaul

business will be worth

USD 100.6 billion

Cascading Expansion in Thailand’s

Domestic Market


Source: : 1 Airport of Thailand PLC. (AOT), Department of Airports (DOA)

5

Aerospace

Industry in

Thailand

Thailand Aircraft Movement1

279 329 325 375 405

293 345 392

493 530

-

200

400

600

800

1,000

2012 2013 2014 2015 2016

International Domestic

[In ‘000 Flights]

572 674

717

868 935 13.07%*

39 44 53 63 69 26 22

70 71 70

-

20

40

60

80

100

120

140

160

2012 2013 2014 2015 2016

International Domestic

Cascading Expansion in Thailand’s

Domestic Market

6

Aerospace

Industry in

Thailand

Thailand Passenger Movement1

20.93%*

[In Million Passengers]

65 66

123 134 139



935

7

12 International Airports Covering all Key Destinations in Thailand

[In ‘000 Flights]

Mae Fah Luang-Chiang Rai

International Airport (CEI)

Phuket International Airport (HKT)

Hat Yai International Airport (HDY)

Don Mueang International Airport (DMK)

Suvarnabhumi Airport (BKK)

Chiang Mai International Airport (CNX)

Krabi International Airport (KBV)

U-Tapao International

Airport (UTP)

Samui International Airport (USM)

Surat Thani International Airport (URT)

Udon Thani International

Airport (UTH)

Ubon Ratchathani

International Airport

(UBP)

Aircraft movement in fiscal year 2016

World-Class International Airports in Thailand


39%

27%

10%

8%

3%

2% 12%

BKK DMK HKT CNX

HDY CEI Others

139

8

12 International Airports Covering all Key Destinations in Thailand

[In Million Passengers]










Airport (UTP)




Airport (UTH)

Ubon Ratchathani


(UBP)

Passengers movement in fiscal year 2016

World-Class International Airports in Thailand


44%

24%

11%

7%

3%

1%

10%

BKK DMK HKT CNX

HDY CEI Others

9

12 International Airports Covering all

Key Destinations in Thailand










Airport (UTP)




Airport (UTH)

Ubon Ratchathani


(UBP)

The Don Mueang

International Airport Master

Plan is currently in the 3rd

phase. This development

project aims to increase the

airport and runway capacity

and further enhance

Thailand’s aviation

landscape.



AOT have 3 ongoing

development projects,

including Suvarnabhumi

Airport Development

Project, Terminal 2, and

Third Runway with total value

of THB 118 billion. The total of

90 MAP capacity will be added

once the projects are

completed.

International Airports

Market Share – Domestic Flights Only Market Share - International and

Domestic Flights

LCC,

30%

26% 7%

Others,

37%

10

Airline Market in Thailand, 2016

11%

19%

20%

20%

Source: Thai AirAsia, Aerospace Engineering Faculty, Kasetsart University

The market share of low-cost airlines contributes to only about

30% of the total market share, which showcases the huge

growth opportunity in this sector

Airline Market in Thailand

Others 1%

30%

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Note: *Forecasted 5-year Compound Annual Growth Rate (CAGR) is 3.66% (2017-2021), Source: Frost & Sullivan

In the period of 2017-2037, Thailand is forecast to spend

USD 36.3 billion in total on commercial airline MRO.

In 2016, the MRO spending in Thailand was around USD

974 million across all segments and only around 40% of

the total Thai MRO expenditure is spent in Thailand

11

Maintenance,

Repair, and

Overhaul (MRO)

Total Thailand’s MRO Expenditure Forecast in 2017-2026

[In USD Billion]

0.97 0.93

0.99 1.05 1.12

1.19 1.27

1.35 1.44

1.53 5.19%*

12

MRO Companies Manufacturing Companies

Key Major International MRO & Manufacturing

Companies in Thailand

HS Code Description Imports

( US$ million)

Exports

(US$ million)

88 Aircraft, spacecraft and

parts 2,750 1,041

854430

Ignition wiring sets & other

wiring sets for vehicles and

aircraft

365 495

840710 Aircraft engines 301 326

401130

New pneumatic tires, of

rubber, of a kind used for

aircraft

16 99

700721 Laminated safety glass for

vehicles and aircraft 15 38

Source: 1Ministry of Commerce (MOC), Customs Department of Thailand

Top 5 Imports and Exports of Aircraft Parts and Equipment, 20161

Imports and Exports of Aircraft Parts and

Equipment, 2016

26 companies (51 projects)

have been promoted under

aircraft part manufacturing

activity

13 companies (16 Projects)

have been promoted under

aircraft and part maintenance and repair activity

BOI promoted activities

Companies in the aircraft

industry tend to look for lower

cost parts for their

manufacturing and repair

plants. Thailand can offer this

price advantage when

compared with neighboring

countries.

Other regional locations,

such as Singapore, may

have a limitation regarding

the ability to facilitate the

expansion of aircraft part manufacturing investment.

Investment Opportunities for Aerospace Industry

Academic Institutions

Thailand creates over 180,000

engineers and 200,000 scientists

annually1. Over 6 leading academic

institutions in Thailand offer degrees

in Aerospace Engineering and related

fields including:

1) Kasetsart University

2) King Mongkut’s University of

Technology

3) Suranaree University of Technology

3) Chulalongkorn University

4) Thammasat University

5) Assumption University

6) Rangsit University

Aviation Training Centers Approved by CAAT2

Center Location

Civil Aviation Training Center (CATC)

Bangkok Aviation Training Center

Royal Skyways

Royal Thai Air Force Training Center

Young Eagle Co., Ltd.

Thai Flight Training Co., Ltd.

Sri-racha Aviation Co., Ltd.

Nakhonpanum University

Thai General Aviation Technology

Pan Am

Academy

Other Aviation Training Centers

Thai Airways Crew Training Center

Source: 1Office of Transport and Traffic Policy and

Planning (OTP), Ministry of Transport, 2 The Civil

Aviation Authority of Thailand (CAAT)

Robust Human Resource

Bangkok

Bangkok

Bangkok

Bangkok

Bangkok

Bangkok

Chonburi

Nakhonpanum

Pathumthani

16

Linkage industries such as

automotive and electronics

Competitive wage compared

with Singapore and Malaysia

Lower aircraft landing/takeoff/

parking fees than some

countries such as Singapore

Obtain BOI privileges to reduce

the financial burden of starting

business

Strategic location for

Asia’s MRO hub

Government strategic plan to

improve U-Tapao as Asia’s

MRO hub

Key Success Factors of Thailand to Become Asia’s

Next Aviation Hub

do not use high technology

Product-based Incentives

A1

A2

A3

A4

B1

B2

Bio-based & Medical

Advanced Manufacturing

Basic & Supporting

High Value Business & Service

Creative & Digital

Incentives

Incentives are largely based on several key factors i.e. level of technology, role in supply chain

8 years

0 year

CIT exemption

Dashboard of Product-Based Basic Incentives

Exemption of Corporate Income Tax

Exemption of Import Duty

on Machinery Exemption of import duty on raw material imported for use

in production for export Non-tax

8 years (w/ Cap)

8 years

5 years

3 years

0 year

-

-

A1

A2

A3

A4

B1

B2 • Tax exemption will depend on the investment amount/ expenditure for enhancing competitiveness • Non-tax incentives i.e. permission to own land and permission to bring in experts to work

Source: BOI

4.11 Manufacture or Repair of Aircraft or Aerospace Devices and Equipment

4.11.1 Manufacture of

Aircraft or Aircraft Parts A1

19

Activities Conditions Incentives

Aircraft parts such as fuselage, key airplane

parts, equipment and other components

4.11.2 Manufacture of Onboard

Devices and Equipment (except

disposable and reusable

aircraft utilities and supplies)

A3 Onboard devices and equipment such as

seats, life vests, carts, cooking equipment,

etc.

4.11.3 Repair of Aircraft or

Aircraft Parts A2

Aircraft parts such as fuselage, key airplane

parts, equipment and other components

4.11.4 Repair of Onboard

Devices and Equipment (except

disposable and reusable

aircraft utilities and supplies)

A4 Onboard devices and equipment such as

seats, life vests, carts, cooking equipment,

etc.

Eligible Activities in the Aerospace Industry

Source: BOI

4.11 Manufacture or Repair of Aircraft or Aerospace Devices and Equipment

4.11.5 Manufacture of

Aerospace Devices and

Equipment A1

20

Activities Conditions Incentives

Aerospace devices and equipment

e.g, Spacecraft/satellite/propulsion

system/carrier rocket parts, electronic and

communication devices, tracking devices,

guidance, navigation, control devices, etc.

Must be approved by related agencies

e.g, Geo-Informatics and Space Technology

Development Agency (Public Organization)

4.11.6 Aerospace

Operating Systems A1

Aerospace operating systems

e.g, Tracking systems, teleport or ground

station systems, monitoring and evaluation

systems, navigation systems, etc.

Must be approved by related agencies

e.g, Geo-Informatics and Space Technology

Development Agency (Public Organization)

Eligible Activities in the Aerospace Industry

Office of the Board of Investment 555 Vibhavadi-Rangsit Road, Chatuchak

Bangkok 10900 Thailand

Tel. : (+66) 2553 8111

Fax : (+66) 2553 8222

E-mail : [email protected]

Website : http://www.boi.go.th/

aerospace industry - thailand automotive institute · 2018-08-14 · value chain of aviation...

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