Military airbase set for commercial take-off in Thailand
The ruling junta's planned conversion of U-Tapao airfield into a commercial aviation hub underscores the rising role of the military in economic affairs
U-Tapao Airport, built in 1966 by the US military to launch B-52 bombardments on Thailand’s communist insurgency-plagued neighbors – Cambodia, Laos and Vietnam – has a new mission: saving the Thai economy from its capitalism-challenged doldrums.
Thailand averaged 2.4% economic growth between 2013 to 2016, while growth continues to lag this year. The country’s former communist and socialist neighbors enjoyed growth rates of 7-8% over the same period. Today, U-Tapao is on a new economic front line under military junta rule.
“We know the country requires a new growth engine, and U-Tapao is part of that,” said Rear Admiral Worapol Tongpricha, director of U-Tapao Airport Authority (UAA). “Without U-Tapao the future growth of the national economy would be difficult,” he said.
Since mid-2015, U-Tapao has been operating under a “One Airport, Two Missions” strategy.
While maintaining its military functions as the Royal Thai Navy’s main airport for marine aircraft and relief operations, U-Tapao Rayong Pattaya International Airport has ambitions to become the country’s third largest commercial airport, after only Bangkok’s Don Muang and Suvarnabhumi international airports.
Passenger traffic at U-Tapao jumped threefold from 170,000 in 2015, to 710,000 last year. With more airlines now servicing the airport, and a second terminal scheduled to open in August, some 1.2 million passengers are anticipated this year.
The government plans to build a third terminal and a second runway which could boost the airport’s capacity to 15 million by the year 2021.
U-Tapao has actually been open to commercial operations since 1990, when the government designated it an international airport to serve the Eastern Seaboard – Thailand’s industrial corridor on its eastern coast, comprising Chachoengsao, Chonburi and Rayong provinces.
Sparked by the discovery of huge natural gas reserves in the Gulf of Thailand, the Eastern Seaboard now hosts Thailand’s petrochemical industry, most of the country’s automotive production and an assortment of light industries in electrical appliances and electronics.
The Eastern Seaboard was the main economic initiative of former Prime Minister Prem Tinsulanonda, the army general who ruled over a series of elected governments during 1980-1988 and significantly opened the economy to foreign investment and trade-driven growth.
Current Prime Minister General Prayuth Chan-ocha, who rose to power in a May 2014 coup, has returned to the seaboard for his own future economic vision for the kingdom.
Prayuth, with his chief economic lieutenant deputy premier Somkid Jatusripitak, have devised the Eastern Economic Corridor (EEC) program as a master plan to raise Thailand’s future growth to 4%-5% and enhance the competitiveness of its many sagging industries.
The EEC, comprising 4,800 hectares in the same three provinces that make up the Eastern Seaboard, aims to draw foreign direct investment to new value-added, higher-tech industries, with ten designated priority sectors that will receive top tax incentives and other inducements.
Those include low income tax rates for foreign executives and experts from the Board of Investment (BOI), the government’s main FDI promotion office. Notably, one of the ten priority sectors is aviation-related industries and logistics, where U-Tapao promises to play an important role.
With its 3,500 meter-long by 60 meters-wide runway built gratis by the US military, U-Tapao has played an important role in bailing out Bangkok’s aviation industry in the recent past.
The airport, situated about 115 kilometers southeast of the capital, served as the main evacuation route for thousands of international travelers who were stranded in Bangkok during the “Yellow Shirt” protests of 2008, that shut down both Don Muang and Suvarnabhumi airports for eight days.
U-Tapao saved the day again in 2011, when devastating floods inundated the capital’s Don Muang Airport, shutting down the facility for months.
Last year, when 32.6 million tourists visited Thailand, up 8.9% year-on-year, U-Tapao helped ease the pressure on Don Mueang and Suvarnabhumi airports, both of which are straining to service the surging numbers, driven largely by Chinese tourists.
Thai Air Asia, a low-cost carrier, in 2015 named U-Tapao one of its five flight bases in Thailand, opening two new routes to Nanning and Nanchang, China, to U-Tapao. Five airlines now operate out of U-Tapao and the airport’s authorities are seeking to attract more.
Nearly 80% of the tourists arriving in U-Tapao head for Pattaya, Thailand’s cheap-thrills beach resort that is particularly popular among Chinese visitors, who accounted for 8.8 million, or nearly 27%, of all international visitors to Thailand last year.
The Thai government’s short-term objective for U-Tapao is to facilitate more tourist arrivals, particularly from China. “Tourism is the main revenue-earner for Thailand for the time being, so they [the government] urgently require an airport to facilitate tourism growth, and there is nowhere else other than U-Tapao,” Worapol said.
Currently the airport is using only 40% of its runway’s capacity, which can handle 60,000 flights a year. Built originally for B52 bombers, U-Tapao has no problem accommodating large modern Airbus 380 or Boeing 747 commercial aircraft.
The airport’s second longer-term mission is to serve as a hub for aviation-related activities and logistics under the EEC program. U-Tapao has allocated 960 hectares of U-Tapao’s 2,560 hectares complex to civilian activities, including a 320-hectare plot of land that could serve as a maintenance, repair and operations (MRO) facility.
Thai Airways International and Airbus SAS have signed a memorandum of understanding to conduct a feasibility study on the MRO project. Boeing, Airbus’ arch rival, has also expressed an interest in establishing a training hub at U-Tapao.
With nearly a third of the airbase allocated to civilian activities, elements within the Thai Navy have reservations about the future of their military mission.
Don Mueang Airport also started life as a military air base for the Royal Thai Air Force and was eventually transformed into Bangkok’s main civilian airport, with the Air Force’s role much diminished.
“That’s one lesson we’ve learned,” Worapol said. “We want to make sure our military operation is not jeopardized, because the location of U-Tapao is very strategic for rendering stability and security in the region.” Allowing the navy to run the airport’s civilian side might prove a boon for security, as well as eliminate unscrupulous taxi scams, he said.
U-Tapao’s development is just one indicator of the rising role of the Thai navy, whose annual budget is normally dwarfed by the more politically powerful army.
On April 18, the Cabinet approved a 13.5 billion baht (US$393 million) for the navy to purchase a Chinese-made Yuan Class S26T submarine, the first of three to be purchased. A submarine base will need to be set up at Sattahip Navy Base, next door to U-Tapao, to accommodate the vessels.
“I think the project at U-Tapao is part of the political economy for helping the navy find generators of income for itself,” said Paul Chambers, an international affairs lecturer at Thailand’s Narsuan University. “The [EEC], of which the navy facilities are a part, could lead to profits for the navy if their land could be leased. We shall see money being made that they hadn’t made in the past.”