New Zealander aircraft maker NZAero announced on Thursday (Apr. 18) that it would upgrade its operations in Thailand from a maintenance and repair facility to its Southeast Asian service hub.
According to an agreement signed on Wednesday (Apr. 17), the company would provide technical training to support all five of its models to Thai Aviation Industries (TAI), the primary maintenance and repair provider for the Royal Thai Air Force.
The deal would amount to NZ$37 million ($21.9 million) for NZAero through sales of components and future aircraft.
"Thailand stands alone as being a major buyer of NZAero products," NZAero CEO Stephen Burrows told Nikkei Asia. "Having a service center here in Thailand is a good base for supporting aircraft in Southeast Asia."
Thailand has purchased 10% of NZAero's output since it sold its first batch of 24 aircraft to the Thai military in 1974.
NZAero also supplies both the Australian and New Zealand air forces.
The company's executives were part of a business delegation accompanying New Zealand Prime Minister Christopher Luxon to Thailand, the first time a Kiwi leader visited the country in 11 years. Relations between the countries cooled after the Thai military ousted an elected government in 2014.
Western democracies, including Australia, the US, and European nations looking to boost economic and strategic relations with Southeast Asia, have warmed to Thailand since coup leaders departed after the May 2023 general election.
Luxon and his Thai counterpart, Srettha Thavisin, have agreed to elevate relations to a strategic partnership by 2026. Bilateral defense talks have been resumed since August to increase interoperability and cooperation against transnational organized crime, particularly human and drug trafficking.
Aside from Thailand, Luxon and his delegation also traveled to Singapore and the Philippines to boost economic, diplomatic, and defense ties.
In particular, NZAero is looking to secure businesses in the Philippines as its annual defense budget is set to increase by 50% over the next five years amid the incidents in the South China Sea.
Meanwhile, Singapore will similarly increase its defense spending to a record level by next year following the resignation announcement of its long-time prime minister, Lee Hsien Loong.
Burrows added that NZAero's aircraft are suited for Southeast Asia's mountainous terrain and economy.
The company is one of nine global makers of turboprop planes, which require less fuel and shorter runways as they are powered by jet thrust and propellers.
Its new SuperPac model could be converted for agriculture, military-led humanitarian aid, and climate change mitigation efforts like cloud seeding and forest firefighting.
Thailand's Board of Investment saw room for growth in the country's largely untapped maintenance, repair, and overhaul sector, especially as commercial air traffic increases amid Srettha's plans to make Thailand a regional air transport hub.
Meanwhile, the Thai Ministry of Transport estimated that commercial airlines spent $12 billion on maintenance, repair, and operations (MRO) in the Asia Pacific region in the past decade, 6.4% of which was transacted in Thailand.
