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7 Jan 2020

Industry

The first-phase MRO at U-Tapao will almost double growth of Thailand’s aviation maintenance and repair market; Thailand should focus on wide-body aircraft to avoid competition with other main competitors in ASEAN (Current Issue No.3069)

            Thailand is one of the aviation hubs in the Asia Pacific region, which is expected to experience a rising demand for aviation maintenance and repair services in the future. The future outlook has become clearer after a cooperative agreement for a Maintenance, Repair, and Overhaul (MRO) facility at U-Tapao is expected to be inked in the middle of 2020, making it possible for the first phase to become operational by 2023. The latest development will pave the way for Thailand to become a MRO center for a large number of aircraft from inside and outside the region. Nonetheless, the MRO market competition has recently intensified as many countries in ASEAN also aspire to become an investment base for this industry as well.

          KResearch views that Thailand needs to build on its strengths to differentiate from other countries to increase the country's comparative advantage during the nascent stage of the race to become a new regional MRO hub. In particular, Thailand should aim at the market of wide-body aircraft as other countries in the region are focusing on the narrow-body aircraft market. Also, Thailand must improve the capacity of MRO workers both in terms of quantity and quality to prepare for the possible shortage of skilled labor in this field due to an increasing demand in the next few years.

             KResearch expects that if the first phase of the MRO facility at U-Tapao – which focuses on wide-fuselage aircraft - proceeds as planned, it should increase the MRO turnover for Thailand by at least USD292 million to USD365 million from the current amount of USD400 million. Plus, there will be more opportunities in the future after the project expands to the next phase, or there are new MRO facilities established in other locations in the future.