TRAVEL IMPACT NEWSWIRE — Edition 62 – Thursday, 28 September 2006

The world’s newest airport opened for business early today following the closure of the world’s oldest commercial airport. Bangkok’s Don Muang airport, until last night located in the same place where the first domestic flight landed in 1914, was shut down to make way for Suvarnabhumi airport, being positioned as the new “Gateway to Asia.” Suvarnabhumi also holds the distinction of the world’s longest delayed airport and certainly Thailand’s most controversial infrastructure project. By early indications, massive logistical shift had gone off painlessly in spite of pouring rain.

First mooted in a study way back in 1961, the massive new airport has been dogged by the twists and turns of revolving door governments which struggled year after year on how best to execute it, until one man came along and rammed it through. That man was not around to officiate at the opening. Former Prime Minister Thaksin Shinawatra was ousted in a quiet Thai regime change on 19 September and is pondering his future in a posh London hotel.

At 155 billion baht (roughly US$ 4.07 billion), Suvarnabhumi is not just an airport but a honeypot, capable of both creating thousands of jobs as well as winning elections. The high stakes and multiplicity of fingers in the cake prevented it from taking off under dozens of previous coalition governments. By dint of his parliamentary majority, Mr Thaksin changed that and set a deadline for its completion with a threat to make heads roll. King Bhumibhol laid the first foundation stone in January 2002, four years after the 1998 Cabinet resolution cleared the budget for the airport.

Although the original completion deadline of July 2005 was missed by more than a year, it was nothing compared to the 45 years the project remained on the shelf while brand new airports or terminals emerged in Hong Kong, Kuala Lumpur, Seoul and Singapore, among others. Further technical details about the airport and its facilities are available at:

The former Don Muang airport was served by just under 100 domestic and foreign airlines, both cargo and passengers. Between Jan-July 2006, it handled 21,816,649 domestic, international and transit passenger movements, up 14.04% over the same period of 2005. The fastest growing were low-cost airline passengers which surged 48% in to 1.46 million in the 3rd quarter of 2006 alone. The first phase of the new airport can handle 45 million passenger movements, up from the 36 million passenger capacity of Don Muang, but a combination of construction delays and rapid growth in passenger throughput means that it will be operating at nearly full capacity almost from the very opening. Airport officials are projecting it will hit 60 million passenger within three years.

As 80% of all visitor arrivals to Thailand enter through Bangkok, it will give a new impetus to travel & tourism throughout the region. It is superbly connected by expressway to all the inner Bangkok city hotels as well as to the beach resort of Pattaya. The surrounding area, today largely a greenfield, is also set to fill up with housing estates and commercial areas to support the thousands of people who will work at or near the airport.

Built with the help of loans from the Japanese government, Suvarnabhumi is owned and operated by Airports of Thailand (AOT), a publicly traded company listed on the stock market but owned largely by the Thai government. By dint of being a monopoly, it is a hugely profitable exercise. Bangkok airport is the largest of the five international airports under the AOT’s control nationwide, the others being Phuket, Chiang Mai, Haad Yai and Chiang Rai.

Bidding for various airport contracts has been robust, accompanied by regular media stories about “irregularities” including one highly publicised case over the supply of X-ray baggage scanners. Journalistic probing dogged the project at every step. Even now, stories are circulating about who will pocket the “payouts” now that the decision-makers are no longer in power.

One of the biggest controversies was over the landing and parking charges for aircraft. Citing their huge cost burden stemming from higher fuel bills and the move itself, international airlines went all-out to dissuade the AOT from levying what they felt to be unjustified increases in parking and landing charges. The AOT insisted that the higher charges were justified by the vastly improved services and facilities.

After some hard bargaining, and some publicly traded barbs, the AOT eventually agreed to defer the increases. Now, the airport Passenger Service Charge (airport tax) will rise as of February 1, 2007 to 700 baht for international flights and 100 baht for domestic flights. The landing and parking fees will rise by 15% as of April 1, 2007. Airport authorities hope the deferment will attract more airlines to fly in. The aeronautical charges are also set to rise.

The airport tax generates roughly 40% of its total revenues, and landing/parking charges about 21%. A key third area is the shopping concessions which generated roughly 26% in the third quarter of fiscal 2006 (April-June). Like the former airport, Suvarnabhumi will have a very mall-like interior, albeit more elegantly laid out. The concessionaire, King Power Duty Free, has been given a 10-year contract for management of roughly 20,000 sq m of retail area. It has officially paid a minimum guarantee of 2.46 billion baht for the first two years and is contractually bound to a minimum guarantee of 16.73 billion baht over the 10 year period.

The previous openings of KL and Hong Kong airports have been carefully studied to ensure no repetition of the mistakes and operational problems they faced. Financial incentives were offered to domestic airlines to start shifting gradually earlier than the opening date in order to test all the equipment. As with any operation this size, many teething problems have been reported, including complaints by the user airlines about the short notice to make the move, but airline executives say the real problems will come when the entire operation migrates and the system has to bear the full load of thousands of passengers and their bags.

If there are any problems, the former Prime Minister would have taken much flak for trying to get too much done too quickly. On the other hand, he won’t be able to claim credit for a successful shift. Either way, there is little doubt that it will continue to be a political football far into the future as its facilities continue to be expanded to cope with growth projections.

There is enough space for four runways and an eventual capacity of 100 million annual passenger movements. Work on a third runway is to start soon, given the fact that competition is already in on its way as Singapore Changi airport expands its terminal and new airports emerge in Dubai, Doha, Hyderabad and Bangalore. A low cost airline terminal will also be built at a projected cost of 900 million baht and a rail connection straight into downtown Bangkok will open in two years.

Don Muang will remain open as the runways need to be used by the Air Force for its base there. It will handle charter traffic, VIP flights and training flights. THAI Airways International’s maintenance centre will also remain. There is talk of using the rest of the real estate to set up a convention centre and commercial complex as well as an aviation museum.


The night of Sept 27/28 2006 saw arguably the largest logistical operation in global aviation history as millions of tons of aircraft and equipment were flown and/or trucked from Don Muang to Suvarnabhumi within a span of roughly 12 rain-soaked hours. There have been a number of rec
ent airport moves in the Asia-Pacific — Seoul, Hong Kong, Nagoya and Kuala Lumpur — but none involve the volume of equipment in an airport the size of Don Muang, now believed to be the largest in the Asia-Pacific in terms of aircraft movement.

As the major user of Bangkok airport, the brunt of the effort fell on the shoulders of Thai Airways which spent years planning the logistics. According to Kobchai Srivilas, Senior Executive VP, Corporate Planning and Information Technology Services, the relocation involved a military-style exercise that began with an inventory and analysis of the total volume of equipment, a plan to identify where it will be loaded and unloaded, as well as transportation routes and potential bottlenecks.

Five Business Units including catering and cargo, plus the Operations centre were transferred. The shift involved thousands of tools, spare parts, engines, cargo containers, pallets, loading/unloading equipment, kitchenware, cranes, forklifts, cabin items, IT hardware, aircraft moving vehicles, etc. These were classified into eight “packaging” units and transported via 2,928 trips between the two airports, mostly by 10-wheel trucks.

Administrative related material not required for direct aircraft operations actually began to be moved 15 weeks ago. The critical equipment was moved between the time Don Muang airport shut down after the last commercial flight landed/took off and six hours later when the new airport opened the following morning. This operation was designed to be precisely timed and directed by a communication network (i.e. trunk radio, LAN, PBX, mobile phone, GPRS) to ensure smooth traffic flow.

A critical element of the move was determining the best day of the week. This involved analysing both the number of aircraft movements plus the state of traffic along the routes to be used. The entire move was televised live nationwide all through the night.

Even as the equipment was on the move overland, 22 THAI aircraft were flown empty between the two airports. The trip distance of 28 nautical miles was covered in 13 minutes with the aircraft flying at an altitude of 2,000 feet at a cruising speed of 210 knots. The last THAI commercial flight from Don Muang was TG 662 to Shanghai at 0145. The first flight departure from Suvarnabhumi was TG 008 at 0630 to the domestic city of Uthai Thani. The first international flight to land was a Lufthansa Cargo aircraft.

Asked if people were avoiding those initial flights just to be on the safe side in case of equipment malfunctions and the delays that will result, as happened in both Hong Kong and KL, Mr Kobchai indicated that exactly the opposite was happening as many wanted to be part of history by being on one of the first-day flights out of Suvarnabhumi.

While moving equipment and aircraft will be only a logistical issue, another key issue is the ‘software’, the impact on airport staff for many of whom a move will require finding new homes, schools and adjusting to an entirely new environment. Fearing a serious impact on service delivery and standards if key staff have to leave the company either by choice or circumstance, THAI hired a local university to survey and analyse staff needs, concerns and expectations, involving 17,433 staff, including 6,747 in operations alone. The survey indicated concerns about a changed way of life, increased transportation costs, relocation of children’s school and resistance to change caused by inadequate internal communication.

The airline has had to help staff find alternate homes via long-term instalment schemes and low down-payment/interest rates. For those who chose to stay in their existing homes, staff buses will be provided by the airline to help them make the daily commute.