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Business

Airbus plans repair site in Thailand

Service demand seen climbing as budget carriers crowd Asian sky

Airbus hopes to open the maintenance yard at a Thai airport in 2021.

BANGKOK -- Airbus looks to open an aircraft maintenance yard in eastern Thailand, hoping to capture rising demand as low-cost carriers sharply increase the number of planes flying in Asia.

The European aircraft builder is conducting a feasibility study with state-owned Thai Airways International to set up the yard at the U-tapao airport, located in an economic development zone in eastern Thailand. A maintenance, repair and overhaul -- or MRO -- facility would handle inspections involving disassembly as well. The airport, close to tourist destination Pattaya and the coastal industrial hub, is scheduled for expansion as a third flight hub serving the Bangkok metropolitan area.

News reports say investment in the MRO yard could reach 20 billion baht ($577 million). Construction is to start as early as January 2018, with the opening targeted for 2021. Airbus expects the number of aircraft operating in the Asia-Pacific region to more than double in two decades, reaching at least 15,000.

The company's ambition matches the interest of the Thai government, which is promoting investments in the Eastern Economic Corridor spanning three provinces including Rayong to move Thailand's industry up the value chain. Aviation has been a focus.

The government will spend 1.5 trillion baht on the U-tapao airport and elsewhere to develop infrastructure and lighten tax obligations for companies that set up shop in the corridor.

The Airbus maintenance site is on track to be the first project for the corridor. Deputy Prime Minister Somkid Jatusripitak cited the Airbus plan as evidence that the vision for the economic corridor is becoming reality. The hope is to attract investments in aircraft components and related businesses.

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