Thailand Aviation Potential is Bright Without a New Tourism Tax

IATA:

The International Air Transport Association (IATA) urged Thailand to strengthen the foundations of its aviation sector as it emerges from the impact of COVID-19. Thailand’s passenger numbers are expected to see a compound annual growth rate of 3.88% between 2024 and 2043.

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“Thailand’s aviation potential is bright. Demand has already reached 88% of 2019 levels, and we can expect the start of real growth from 2025. With world-class tourism assets and a growing regional business sector, Thailand is well positioned to become a top 15 global market for aviation in the next two decades,” said Dr Xie Xingquan, IATA’s Regional Vice President for North Asia and Asia-Pacific (ad interim). 

Xie urged the government and authorities to strengthen Thailand’s aviation sector further to maximize the benefits that aviation can catalyze across the Thai economy. 

“With 84% of tourists to Thailand arriving by air (pre-COVID), the importance of aviation to this key economic sector (7.4% of GDP pre-COVID) is clear. Nurturing tourism should be a priority. A low tax burden is key to securing Thailand’s leading position in Asia in the tourism and meetings, incentives, conferences, and exhibitions (MICE) sectors and strengthening the Bangkok hub.

Instead of considering, again, the introduction of a tourism tax, which can dampen passenger demand, the government should look at ways to grow the sector with lower costs,” said Xie. 

Along with avoiding increasing aviation’s tax burden, Xie highlighted infrastructure, digitalization, and sustainability as key focus areas.

Infrastructure:

The upgrading and expansion plans at Suvarnabhumi Airport are critical to ensuring the airport’s infrastructure can support the anticipated growth in air travel.

“A revised masterplan for Thailand’s airport capacity is critical to delivering the economic benefits of aviation. This effort can be maximized with customer input. Consultation with airlines will ensure alignment with market developments for the timely delivery of functional and cost-effective infrastructure,” said Xie. 

Digitalization:

Thailand is also investing in technology and automation to improve passenger processes throughout the airport, including automated border control gates. 

“The efforts to improve the passenger experience with technology will deliver their best if aligned with global initiatives to modernize processes. These include adopting One ID standards to implement digital identity in the passenger journey and One Record to streamline cargo processes,” said Xie. 

Sustainability:

Thailand’s Ministry of Energy is currently working on the draft National Oil Plan 2024.

“As aviation decarbonizes, Thailand has a golden opportunity to reap the economic benefits of establishing a successful Sustainable Aviation Fuel (SAF) production.  While the government explores policies to support SAF production, it needs to remember that airlines can only purchase SAF if it is available on the market.

There must be sufficient SAF supply before any mandate is introduced, with flexibility across the entire mandate period. Airlines must not be penalized if national targets for production are not met,” said Xie. 

About the author

Juergen T Steinmetz

Juergen Thomas Steinmetz has continuously worked in the travel and tourism industry since he was a teenager in Germany (1977).
He founded eTurboNews in 1999 as the first online newsletter for the global travel tourism industry.

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