IATA urges Thailand to strengthen foundations of its aviation sector

The International Air Transport Association (IATA) urged Thailand to strengthen the foundations of its aviation sector as it emerges from the impact of COVID-19.

Thailand’s passenger numbers are expected to see a compound annual growth rate of 3.88% between 2024 and 2043.

The call was made during the ongoing IATA World Financial Symposium and World Passenger Symposium 2024 in Bangkok.

IATA regional vice-president (ad interim) for North Asia and the Asia Pacific Xie Xingquan declared: “Thailand’s aviation potential is bright. Already demand has reached 88 percent of 2019 levels and we can expect the start of real growth from 2025. 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.”

A need for urgent measures

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.

Xie said: “With 84 percent of tourists to Thailand arriving by air (pre-COVID), the importance of aviation to this key economic sector 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.”

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

Key points for consideration

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.

According to Xie: “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.”

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

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

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

According to Xie: “As [the aviation sector] decarbonises, 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. There needs to be sufficient SAF supply before any mandate is introduced, with flexibility across the entire mandate period. Airlines must not be penalised if national targets for production are not met.”