aerospace industry - thailand automotive institute · 2018-08-14 · value chain of aviation...
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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
Note: *Compound Annual Growth Rate 2012-2016
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
Note: *Compound Annual Growth Rate 2012-2016
Source: : 1 Airport of Thailand PLC. (AOT), Department of Airports (DOA)
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
Source: : 1 Airport of Thailand PLC. (AOT), Department of Airports (DOA)
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]
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)
Passengers movement in fiscal year 2016
World-Class International Airports in Thailand
Source: : 1 Airport of Thailand PLC. (AOT), Department of Airports (DOA)
44%
24%
11%
7%
3%
1%
10%
BKK DMK HKT CNX
HDY CEI Others
9
12 International Airports Covering all
Key Destinations in Thailand
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)
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.
Don Mueang International Airport (DMK)
Suvarnabhumi Airport (BKK)
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
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