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Thailand’s low cost airline hub opens new terminal

Thailand’s low cost airline hub opens new terminal

BANGKOK: Don Mueang International Airport, Thailand’s hub for low-cost airlines, officially opened a second terminal on Tuesday to cope with soaring passenger traffic — but is likely to run out of capacity again before the end of the year.

The new terminal raised the century-old airport’s annual passenger capacity to 30 million from 18.5 million, but actual traffic in 2015 has already grown to 28.8 million, an 85% increase from 2013. According to the Centre of Asia Pacific Aviation (CAPA) in Sydney, Don Mueang has become the world’s largest low-cost carrier airport in terms of passenger traffic.

As more people travel with budget airlines, Prasong Poonthaneat, chairman of government-controlled operator Airports of Thailand, expects that traffic at the airport will increase around 20% in 2016, exceeding the new capacity in just a year.

Helped by the rapid increase in traffic, AOT reported record net profits of 18.7 billion baht in the fiscal year ended September. The company operates six airports including Thailand’s main gateway, Suvarnabhumi International Airport in Bangkok. But the runaway growth also highlights the lack of capacity of its airports at a time when safety concerns about the country’s aviation standards are mounting, following a downgrade by the International Civil Aviation Organization last year.

In February, the International Air Transport Association called on the Thai government to improve the country’s overcrowded airports, specifically raising concerns about Suvarnabhumi, which operates at 15% over its capacity. “Aviation is critical to Thailand’s economic success,” Tony Tyler, IATA’s director general and chief executive said in a Feb. 18 statement. “It is in jeopardy, however, unless key issues of safety, capacity and costs are addressed urgently.”

Tourism has been the only bright spot in Thailand’s otherwise dismal economy. Last year, total international arrivals hit a record high of 29.88 million, an increase of 20% year-on-year after martial law was lifted in April. The government projects that the number of tourists will climb another 9% this year to 32.5 million.

AOT, owned 70% by the Thai government, says it will take further steps to renovate and expand the six airports it operates. “The rapid passenger growth requires us to speed up expansion,” chairman Prasong said.

At Don Mueang, the company plans to spend 20 billion baht in the coming 5 years to expand Terminal 1 and boost the airport’s capacity by 33% to 40 million passengers. Suvarnabhumi is set to double its capacity to 90 million by 2025 under a 62-billion-baht expansion plan which is expected to start in July. A third runway is also planned.