Bangkok Airport Sets Expansion Plans

State-owned Airports of Thailand PCL is planning a massive investment program to increase annual passenger capacity at Suvarnabhumi airport here to 80 million by 2016 from 45 million at present.

The airports operator plans to spend as much as 10 billion baht, or about $300 million, to build a new domestic terminal that would accommodate 20 million passengers a year. The budget also includes a transportation system that would link the domestic and international terminals.

“The new domestic terminal is expected to commence operation in 2013 and boost Suvarnabhumi’s capacity then to 65 million,” AOT President Serirat Prasutanond said in an interview Wednesday. The company also plans to invest 77 billion baht to build a midfield concourse that would facilitate an additional 15 million passengers a year and a third runway by 2016, Mr. Serirat said.

AOT plans to invest a separate 5.7 billion baht to build a new international terminal in Phuket, Thailand, and use the existing facility to service domestic flights. The new terminal at Phuket airport is expected to start operating in 2013.

“We plan to finance around half of our investment by ourselves and rely on external funding for the other half,” Mr. Serirat said.

Potential funding sources include domestic borrowing, issuance of long-term bonds and international agencies such as Japan International Cooperation Agency, he said. “We are not ruling out a potential cash call, but considering the current market environment, debt financing is relatively cheaper,” he said.

AOT is planning to use assets such as land it owns within and surrounding the compound of Suvarnabhumi airport, Mr. Serirat said.

It plans to rent out the land to private operators to develop into commercial zones that include a community mall, medical centers, a three-star hotel, offices and an entertainment complex, he added.

News by Phisanu Phromchanya
Published on The Wall Street Journal – online.wsj.com