The Thailand Board of Investment (BOI) has approved investment promotion incentives for companies that choose Thailand as their base of aircraft maintenance, repair and overhaul (MRO) activity.
Companies that expand to Thailand receive investment incentives such as 8 years of corporate income tax exemption, plus an additional 5 years of 50% reduction of the corporate income tax rate after the exemption period. BOI offers another 2-4 years of corporate income tax exemption for investment projects based in the Eastern Airport City (Aerotropolis) that pair with local educational institutions on workforce development initiatives.
Thailand’s MRO flagship will be the Aerotropolis, anchored by U-Tapao airport, in the country’s Eastern Economic Corridor. The Aerotropolis project, part of a 15-year aviation development plan for Thailand, calls for an expansion of U-Tapao’s passenger capacity from 5 million passengers to 54 million in the next 30 years. The Aerotropolis will serve as an MRO hub and will be connected by rail, roadway, and sea to other major airports including Suvarnabhumi and Don Mueang International Airports.
A delegation led by Punlop Punyasiri, Director of Industry Linkage Development Division at Thailand BOI, attended MRO Americas 2019 in Atlanta, Georgia, to showcase Thailand’s aerospace industry and spread awareness about the various incentives that are being offered to MRO investors from North America and other regions. At the event, BOI also organized a seminar titled “Thailand Investment Year – What’s NEW?”
Thailand’s MRO expenditure from 2015-2024 has been forecast to reach a total amount of USD $10.6 billion, with airframe, engine and component MRO being specifically targeted. As Thailand hosted a record 38 million visitors in 2018, and expects 40 million in 2019, its aerospace sector is growing at an astounding rate uniquely positioning the Kingdom to lead ASEAN in MRO activity.
“As the global aviation market shifts east and demand for air travel is increasing in Asia, a significant number of new opportunities in the aerospace manufacturing and MRO industries are being created,” said Chokedee Kaewsang, Deputy Secretary General of the Thailand Board of Investment. “Thailand’s geographic position and strong expertise in the aerospace industry are why global companies choose us when they’re ready to expand their operations to Asia.”
Recently, a leading aircraft manufacturer announced plans to establish a new MRO facility at U-Tapao Airport, in a joint venture with Thai Airways. Revima, the French APU and landing gear MRO specialist, has started construction of a new landing gear overhaul facility in Chonburi, Thailand. The 12,000m2 facility will focus on Airbus A320, Boeing 737 and ATR family landing gears. Another investor, BOSA, a UK-based aircraft component maintenance services provider, has launched a joint MRO venture, BOSA-Thayaan Aircraft Service (BTAS), to perform line maintenance operations at U-Tapao Airport.