IATA urges Thailand to strengthen aviation potential

The International Air Transport Association (IATA) has urged Thailand to strengthen the foundations of its aviation sector as it emerges from the impact of Covid-19, and is expecting to see a compound annual passenger number growth rate of 3.88% between 2024 and 2043.

“Thailand’s aviation potential is bright. Already demand has reached 88% of 2019 levels and we can expect the start of real growth from 2025,” said Dr Xie Xingquan, IATA’s Regional Vice President for North Asia and Asia-Pacific (ad interim).

“With world-class tourism assets and a growing regional business sector, Thailand is well positioned to become a top 15 global market for aviation in the next two decades.

Xie urged the government and authorities to take steps to further strengthen Thailand’s aviation sector to maximise the benefits that aviation can catalyse across the Thai economy.

“With 84% of tourists to Thailand arriving by air (pre-Covid), the importance of aviation to this key economic sector (7.4% of GDP pre-Covid) is clear.

“Nurturing tourism should be a priority. A low tax burden is key to securing Thailand’s leading position in Asia in the tourism and meetings, incentives, conferences and exhibitions (MICE) sectors and to strengthening the Bangkok hub.

“Instead of considering, again, the introduction of a tourism tax, which can have a dampening effect on passenger demand, the government should look at ways to grow the sector with lower costs,” said Xie.

Along with avoiding any increase to aviation’s tax burden, Xie highlighted infrastructure, digitalisation and sustainability as key focus areas.

Infrastructure: The upgrading and expansion plans at Suvarnabhumi Airport are critical in ensuring the airport infrastructure is able to support the anticipated growth in air travel.

“A revised masterplan for Thailand’s airport capacity is critical to delivering the economic benefits of aviation. This effort can be maximised with customer input. Consultation with airlines will ensure alignment with market developments for the timely delivery of functional and cost-effective infrastructure,” said Xie.

Digitalisation: Thailand is also investing in technology and automation to improve passenger processes throughout the airport, including automated border control gates.

“The efforts to improve the passenger experience with technology will deliver their best if they are aligned with global initiatives to modernize processes. These include adoption of One ID standards to implement digital identity in the passenger journey and One Record to streamline cargo processes,” said Xie.

Sustainability: Thailand’s Ministry of Energy is currently working on the draft National Oil Plan 2024.

“As aviation decarbonizes, there is a golden opportunity for Thailand to reap the economic benefits of establishing a successful Sustainable Aviation Fuel (SAF) production.  While the government explores policies to support SAF production, it needs to keep in mind that airlines can only purchase SAF if it is available on the market,” said Xie.

“There needs to be sufficient SAF supply before any mandate is introduced, with flexibility across the entire mandate period. Airlines must not be penalized if national targets for production are not met.” – TradeArabia News Service