13.03.09 Transport Ministry's one-airport policy smells fishy
Source: Bangkok Post
On the face of it, the Transport Ministry's one-airport policy seems
sensible and conducive to forging Bangkok as the regional hub for air
transport.
But in view of the vested interests behind the move, the creaking
passenger handling capacity at Suvarnabhumi airport (SA) and ample
space at the older Bangkok International Airport (BIA, also known as
Don Mueang International Airport), Transport Minister Sohpon Zarum's
one-airport policy is myopic, dubious and costly in the longer term.
It is widely known that SA is already running close to its capacity
of 45 million passengers annually. The political crisis that ended up
closing SA and BIA for more than a week last year and the ongoing
worldwide economic slump have given Airports of Thailand (AoT) a
breathing space to expand capacity to handle the recovery.
When passenger traffic growth resumes in earnest, the passenger
handling threshold will be reached within the next four to six years.
This means SA will have to build a midfield concourse that can increase
total capacity to 60 million passengers annually. The cost of this
add-on is estimated to exceed 50 billion baht, close to half of the
entire budget to build SA in the first place. But the bidding process
and construction work plans for additional capacity are still on the
drawing board.
Mr Sohpon's policy to relocate the domestic flights of Thai Airways
International, the national flagship carrier, to SA will immediately
lead to overcrowded conditions and overwhelm the facilities and
resources of the main airport.
BIA, in the meantime, has a 30-million capacity that is largely
unused. The low-cost carriers (LCCs) at BIA have been using just a
fraction of available space and flight handling capacity.
As SA will soon operate at maximum capacity, the use of BIA is
imperative. Thailand needs at least two airports in the long term. As
soon as additional facilities at SA are completed, it will almost
immediately face capacity constraints. Unless SA is able to handle
upwards of 100 million passengers over the next three decades, the use
of BIA makes sense.
A range of other metropolis capitals such as Tokyo and London are
served by several airports. The robust growth of LCCs worldwide makes
BIA an ideal hub for an entirely different and fast-growing segment of
the air transport industry.
Mr Sohpon's relocation of domestic Thai Airways flights complicates
the development of Thailand's low-cost operators. Nok Air is an
incomplete version of Thai Airways' LCC strategy. If Nok Air is to
remain independent and autonomous, with Thai Airways only as a
shareholder, then the national flagship airline is right to try to
position itself for a competitive place in the LCC segment, and hence
its move out of BIA is premature and ill-conceived.
A long-term, two-airport policy is also advisable in dire economic
times. Slumping global demand and bad economic news everywhere will
take at least two to three years to unwind and recover from. This is
not a time to spend precious resources on additional capacity at SA
when BIA is more than adequate, with easy and effective toll road
connections to the central business district as well as to SA.
Mr Sohpon's stated objective of making Bangkok a regional hub is
overstated. Ranked just behind Hong Kong International Airport but well
below Tokyo International Airport in Haneda and Beijing Capital
International Airport, Bangkok is already the busiest airport in
Southeast Asia.
Unlike Singapore's Changi airport, most of SA's arrivals are
considered "origin and destination" passengers, with the intent to get
off in the Thai capital, not just to pass through in transit. Given the
patterns of passenger traffic growth, this pecking order is likely to
remain over the next several years.
SA will remain Southeast Asia's busiest airport, but its growth in
tandem with BIA's reuse can still develop Bangkok into a leading
regional air transport hub.
Moreover, AoT owns and operates both SA and BIA. Putting BIA into
full use for LCCs, chartered flights and other legacy airlines on a
voluntary basis would generate the same income for AoT without
competition.
The short-term cost of reusing BIA will be more than compensated by
long-term gains as the older airport expands passenger capacity
automatically without the debt that would accumulate from SA's
continuous expansion.
Of course, what is the most fishy about Mr Sohpon's move is the
immediate benefits that will accrue to King Power International Group's
duty-free monopoly at Suvarnabhumi.
Forcing passengers from BIA to SA enlarges King Power's captive
market. King Power is alleged to be the main backer of politicians
linked to Newin Chidchob.
At the height of the political confrontation last year, Mr Newin
openly used King Power's Pullman hotel as his base of operations.
Overcrowding passengers at SA also will reinforce plans to start
bidding and constructing the midfield concourse, which will certainly
be accompanied by allegations of graft and irregularities. A host of
these during the construction of SA, going back to the days of former
prime minister Thaksin Shinwatra and former transport minister Suriya
Juengrungruangkit, have yet to be resolved.
Prime Minister Abhisit Vejjajiva was well-advised to check the
Transport Ministry's plan to essentially overcrowd and overwhelm SA
while leaving precious and available resources at BIA idle.
Don Mueang airport is not fancy but it is adequate. Together with
Suvarnabhumi airport, it can assist Bangkok to be a regional air
transport hub, ease passenger demand, and save investment costs that
could be spent on more urgent infrastructure projects for many years.
The writer is Director of the Institute of Security and
International Studies at the Faculty of Political Science of
Chulalongkorn University.
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