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King Power Duty Free back at Suvarnabhumi Airport

Friday, February 1st, 2008

The Civil Court has ordered Airports of Thailand (AOT) to let King Power International Group resume business at Suvarnabhumi pending a decision on their dispute.

AOT earlier cancelled its contracts with King Power, the operator of duty-free shops and commercial areas at the airport, for alleged irregularities in the contracting process. The firm filed a counter lawsuit with the Civil Court and sought damages of 68 billion baht.

The court’s injunction, issued on Wednesday and released yesterday, said the firm must be allowed to operate until a ruling is made in their dispute.

It also prohibited AOT and its executives from giving press interviews that might affect King Power’s operations.

AOT has ordered King Power‘s eviction from duty-free outlets and commercial shopping space at the Bangkok airport.

The contracts ran into problems early last year after the AOT board accused King Power of breaching the public-private joint venture law.

It said King Power had concealed information to keep the official investment in each of its two commercial developments at the airport under one billion baht to avoid proper scrutiny.

The court also instructed King Power to pay about three billion baht to the AOT, which has not received any revenue from the company since the airport opened. (BkkPost/Amornrat)



Airport of Thailand to push airlines back to Don Muang airport

Wednesday, November 28th, 2007

Airports of Thailand wants to use the abandoned Don Muang airport for international flights to help serve Bangkok passenger traffic and delay the expansion of Suvarnabhumi airport.

The idea has been opposed, however, by the agencies involved, which insist that the Airports of Thailand use only Suvarnabhumi for the sake of transport convenience.

Airports of Thailand adviser Passakorn Suwankanit said Suvarnabhumi airport would reach its full capacity of 45 million passengers a year in 2009 even if Don Muang airport served all domestic flights.

In his opinion, even though Suvarnabhumi could be expanded under its second- and third-phase development, traffic would reach saturation point by 2015.

“The best way out is to use Don Muang as the airport for both domestic and international flights of low-cost airlines.

“This will enable us to delay the expansion of Suvarnabhumi airport for five years,” Mr Passakorn said at a workshop attended by Airports of Thailand executives and airlines’ representatives. He expects the traffic of low-cost airlines to grow by 20-30 per cent annually.

Today, Don Muang airport serves only the domestic flights of Thai Airways International (THAI), One-Two-Go and Nok Air. They voluntarily returned to Don Muang to help relieve congestion at Suvarnabhumi which is operated with one passenger terminal at its northern part and two runways.

Unless more flights are removed to Don Muang airport and Suvarnabhumi airport will need its third and fourth runways and another passenger terminal in the next five years and that would mean that construction work has to begin at once, Mr Passakorn said.

Airports of Thailand vice president Kulya Pakakrong said Airports of Thailand had only 14 billion baht in cash and was about to pay 10 billion baht for extra work done before the opening of Suvarnabhumi airport last year.

Development of the 120 billion baht Suvarnabhumi airport resulted in an annual interest burden of two billion baht to Airports of Thailand. The airport’s expansion would cost Airports of Thailand about 67 billion baht.

If the work had to start right away, Airports of Thailand would have to take out loans for the total amount and that would raise its annual interest burden to about six billion baht, she said.

Kannika Khemawuthanont, deputy director-general of the Civil Aviation Department, insisted that using only Suvarnabhumi airport for Bangkok would be more convenient for passengers on connecting flights and cargo transport and that would enable airlines to save on costs.

She suggested Airports of Thailand improve its management to maximise the use of Suvarnabhumi without having to depend on Don Muang.

She said Airports of Thailand had proven that it was able to do so in the case of Don Muang while the construction of Suvarnabhumi airport was under way.

Efficient management could boost Don Muang‘s actual capacity to 38 million passengers annually compared to the original capacity that stood at 33 million passengers, she said.

Mrs Kannika also said the use of both Don Muang and Suvarnabhumi causes difficulties in air traffic control because the two facilities are too close to each other.

Chokechai Panyayong, asset management director of THAI, agreed that Airports of Thailand could improve its management to increase the actual capacity of the existing facilities at Suvarnabhumi airport without having to use Don Muang.

He said only 30 per cent of the passengers using Suvarnabhumi airport were in transit, while the proportion at Changi airport in Singapore was 70 per cent.

The figure reflected problems at Suvarnabhumi, he said.

With improved management, Airports of Thailand could delay expansion at Suvarnabhumi airport until it was really ready, he said.  (Bkk Post)



Don Mueang Airport will turn to logistics hub

Monday, November 5th, 2007

Airports of Thailand (AOT) president Chana U. Sathaporn says he will pursue a dual airport policy and turn Don Mueang airport into a logistics hub for the region.

AM Chana, who will sign an employment contract with the Airports of Thailand today, said he wanted both Suvarnabhumi and Don Mueang airports to be used by the aviation industry.

He would encourage international airlines and new budget airlines to run flights in and out of Thailand to boost revenue.

Making use of both airports would reduce the financial burden on the state, as the expansion of Suvarnabhumi airport would require a huge investment.

“The second-phase Suvarnabhumi airport expansion plan would cost more than 60 billion baht. We still owe debts totalling 75 billion baht to the Japan Bank for International Cooperation (JBIC). If we are not ready, we should not create more debt beyond our capacity to repay. Therefore, we have to efficiently manage the existing Don Mueang airport to make it financially self-reliant,” he said.

Over recent years, a huge amount of state money had been spent on developing Don Mueang airport.

It would be lamentable if the old airport was turned into a shopping mall, he said.

With more than 300,000 square metres of space, the airport had the capacity to raise revenue with appropriate planning and management.

The airport’s empty cargo areas could be used as a logistics centre where export and import firms could rent space to set up their offices.

He wanted to develop Don Mueang into a logistics hub for Asia, making use of its well-equipped facilities, which included warehouse space and runways.

AM Chana said he would quickly commission a study of the proposed logistics centre.

The use of cargo space and rental rates in other countries would be surveyed. These figures would help the Airports of Thailand set appropriate fees.

After the study was completed, AM Chana said, he would call for bids from interested firms to operate the logistics centre.

The private sector would also be invited to invest in an aircraft repair centre to serve both regional and domestic airlines.

AM Chana said cooperation from all airlines was needed if plans to use both airports were to be successful.

The Airports of Thailand plans to speak to airline operators to gauge their opinions.

However, Thai Airways International has already come out against the dual-airport policy, saying it did not want to shoulder the increased investment needed to run flights from both airports.

A study on the combined use of the two airports, being carried out by the International Civil Aviation Organisation (ICAO), is expected to be completed by the end of the year.

AM Chana said he would focus on increasing revenue and reducing expenses as well as fixing existing problems at Suvarnabhumi airport.

Confusing signboards and long immigration queues would be corrected, he said.

Although he possesses a military background, AM Chana said he would not opt for a military approach in working at the Airports of Thailand.



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