Bangkok's new airport to spur competition for regional hub status

The Suvarnabhumi Airport, with an annual capacity of 45 mln passengers, will open on Thursday, becoming Southeast Asia's largest airport.

Analysts said the new airport will face cut-throat competition from Singapore and Malaysia as the rivals plan to build new air terminals to increase passenger capacity and outpace Thailand.

"Even after the opening of Suvarnabhumi, Thailand cannot sit still," said Choosak Ratanachaichan, an aviation analyst at Kasikorn Research Center.

"We have to think about expansion as well. We cannot be satisfied with 45 million passengers because others, mainly Singapore, will soon catch up with us," Choosak said.

Singapore's Changi Airport, which received a record 32.4 mln passengers last year, will finish building a new terminal by 2008 as part of efforts to defend its position as the region's leading aviation hub.

The new terminal will double Changi's annual passenger handling capacity to 64 mln, far outpacing Suvarnabhumi's initial scope.

Siriwan Naphawaranon, an aviation analyst at Siam City Securities, said Bangkok's new airport must quickly boost its capacity to beat Singapore and Malaysia.

"Since global demand for air travelling will remain robust for the next 20 years, everyone wants to increase their air traffic capacity to attract more passengers," Siriwan said.

"Everyone wants to become a key regional hub, so competition for Thailand is very tough," she said.

While Suvarnabhumi's initial capacity stands at 45 mln passengers per year, the airport can increase it to 100 mln once the new facility becomes fully operational.

"Thailand is well aware of the regional competition. Most of our neighbors' airports are pretty new, so they can easily upgrade facilities to attract more passengers," said Sukhbir Khanijoh, an economist at Kasikorn Securities.

Malaysia's Kuala Lumpur International Airport, which opened in 1998, will finish building a second satellite terminal by 2008 to double passenger handling capacity to more than 40 mln per year.

Thailand's airport authority plans to build a separate terminal for low-cost airlines at Suvarnabhumi to compete with Singapore and Malaysia, which both opened no-frills terminals in March this year.

Suvarnabhumi, located 25 kilometers east of Bangkok, has been under development for more than 40 years and suffered repeated delays due to construction problems and graft allegations.

The new airport will replace the overburdened Don Muang Airport, which handles about 37 mln passengers, two million more than designed.

"The timing of opening Suvarnabhumi is good. If we missed this opportunity, Thailand would be left behind regional competitors for good," aviation analyst Choosak said.