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Sawasdee Suvarnabhumi!



Suvarnabhumi International Airport officially opened on 28-Sep-06,

after many years of delays. But the airport should help reinvigorate

Thailand’s role in the global aviation industry.

Thai Airways successfully migrated its operational base from Don Muang to Suvarnabhumi (pron. Su-wa-na-poom), which was marked by the last flight to depart from Don Muang to Shanghai and the first flight to arrive at Suvarnabhumi from Delhi.

Thai’s six main activities (Cargo and Mail Commercial, Ground Support Equipment Services, Catering Services, Aircraft Maintenance Centre, Customer Services, and Operations Centre), have completely transferred their equipment and personnel to Suvarnabhumi. Under this massive programme, a total of 1.8 million pieces of equipment have been moved, including 22 aircraft, which were flown as ferry flights without passengers from Don Muang to Suvarnabhumi overnight.

President of Thai Airways, Flg Off Apinan Sumanaseni, stated, “as the national carrier of Thailand, we are rather nostalgic of Don Muang after having operated there for the past 46 years. In addition, we are excited about our move to Suvarnabhumi, which offers a whole new range of travel experiences, utilising modern state-of-the-art facilities tailored to the changing needs of today’s global traveler".

Thai Airways has opened new lounge facilities at Suvarnabhumi, as part of its USD400 million investment at the airport, including a tripling of capacity of its cargo facilities and development of a new aircraft MRO centre.

Rising charges

But not all airlines are happy about some aspects of the new airport, particularly higher charges.

Thai AirAsia, Nok Air and One-Two-Go have called on Airports of Thailand (AoT) to review charges at Suvarnabhumi, which they say are considerably higher and threaten their financial health. Passenger service charges at AoT's five international airports, including Suvarnabhumi, are due to increase from THB500 to THB700 for international services and from THB50 to THB100 for domestic services on 01-Feb-07, while a 15% increase in landing and parking charges has been deferred by six months until 01-Apr-07.

Aeronautical Radio of Thailand Ltd, the Thai state-owned air traffic control company, has also increased its charges from THB8,900 per flight to THB10,000.

Duty free and retailing boost

Airports of Thailand (AoT) awarded King Power the whole-airport duty free concession for Suvarnabhumi, which involves a continuation, for ten years, of the company's existing exclusive airport duty free concession in Thailand. In addition, in Mar-05, AoT awarded King Power the master contract for all commercial operations at the new airport after a competitive bid.

King Power has been awarded the right to manage 20,000 sqm of commercial space in return for a guaranteed payment of a minimum of USD35.8 million annually. Retail operators at the airport are reportedly required to pay up to 20% of sales per month, as part of their lease agreements with King Power. There are a total of 19 duty free outlets in the airport, of which five will be multi-category stores.

Suvarnabhumi's main terminal building is laid out over seven storeys. Flight departure gates for Thai Airways and Star Alliance partners are located in the airport's East Wing.

What next for Don Muang?

The 92-year-old Don Muang Airport – the 18th busiest in the world last year in terms of passenger throughput – faces an uncertain future.

According to recent reports, the airport, which has two runways (3,500 m and 3,700 m), 23 taxiways, parking stands for 95 aircraft and three terminals with a combined space of 322,067 sqm, could be retained for “general aviation” purposes, including VIP and charter flights, as well as an MRO hub. The terminals may also be converted to a trade and exhibition centre, shopping mall or bus terminal.

But AoT conceded this week that no official forward usage plan for Don Muang had been finalised and that attention is focused at present on making the transition to Suvarnabhumi a success.

Outlook for Suvanabhumi

Bangkok’s new airport will help ease congestion at the Thai capital, although the airport’s capacity for 45 million passengers will be quickly filled. Don Muang airport handled 39 million passengers last year and 21.3 million in the first half of 2006 alone, up 15.4% year-on-year.

Reported plans to develop more capacity at Suvarnabumi, including additional mid field concourse buildings and an LCC terminal with capacity for up to 15 million passengers p/a, may need to be expedited to give Bangkok the room it needs to continue to grow.

And while the opening of Suvanabhumi generates significant media interest and speculation, two other leading Asian hubs, Singapore Changi and Hong Kong International Airport (HKIA) are developing fresh new capacity ahead of demand. To the west, the ten leading Middle East airports are investing USD23.5 billion in new airport capacity by 2012 that will provide capacity for 318 million passengers p/a, up 292% on current levels, and taking total airport capacity in the region to 400 million.

Bangkok may have a new airport, but the competition in the years ahead will be intense.

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