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AoT banks on 'airport city' plan to boost revenue

Mar 31. 2014
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By Bamrung Amnatcharoenrit
The N

Airports of Thailand Plc (AoT) is heavily promoting its "airport city" plan covering Suvarnabhumi, Don Mueang and Phuket airports as a way of strengthening long-term revenue growth.
It hopes the plan will boost its non-airport-service revenue, which comprises mainly retail-space rentals, to 60 per cent from the current 40 per cent of the total.
Makin Petplai, AoT’s president, said during a visit to Hong Kong International Airport on Friday that the initiative was aimed at encouraging passengers to spend more, and to see airports as more than simply a place to board flights.
Each of the airport cities will feature a different emphasis, depending on location and lifestyle. The airport in Phuket is being positioned as a high-end shopping destination. Don Mueang is to be promoted as a shopping city. 
Suvarnabhumi is receiving more investment in technology, aimed at promoting it as a hi-tech airport and making services simpler. Eventually, passengers will have more time at the airport to spend. As well, its terminal will be decorated with a high-tech concept. 
Flying Officer Chaturongkapon Sodmanee, general manager at Don Mueang International Airport, said Don Mueang was the biggest project as there is a large space to develop, thanks to the growing number of arrivals by low-cost carriers.
The project is still being studied, especially in terms of investment cost. Chaturongkapon hoped it would be completed in 2017, becoming a shopping destination not only among passengers, but also Bangkokians.
The project will connect the airport to a station on the Red Line suburban railway, scheduled for completion in 2018.
Chaturongkapon said two warehouses will be razed and replaced with a five-storey building with space of 100,000 square meters to house airport offices and retail outlets. 
Don Mueang is seeing more traffic with the arrivals of low-cost carriers. This year, Thai AirAsia X and Nok Scoot, medium- and long-haul low-cost carriers, will take off from the airport. AirAsia X has requested 800sqm of space at the airport, but the AoT has only 200sqm to give. As well, new charter airlines will be launched, opening up more business opportunities at the airport. 
For this reason it is essential that the airport improve facilities and Bt10 billion has allocated. Bt3 billion has been poured into modernising Terminal 2, which is scheduled to open this October. Bt7 billion has been spent on improving other facilities such as taxi access, electricity systems and signage. The improvements will be completed in 2016-2017.
In the future, Terminal 1 will be used for international passengers and Terminal 2 for domestic service. The number of passenger is projected to increase to 25 million in 2015 and 29 million in 2016, up from 16 million last year. This year, arrivals are projected at 18-19 million. 
The political tension has seen growth in passengers and flights at Don Mueang miss their targets. In the first quarter, passenger numbers increased 19 per cent, against a projected 27 per cent. Flights grew by 21 per cent, versus a 26.9-per-cent projection. 
Plagued by the national uncertainty, Makin said the AoT has kept its net profit projection unchanged this year, at 10-per-cent growth from Bt9.5 billion in 2013.

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