In conversation with
In conversation with Mr. Tisanu Ratanarat

FDI Spotlight: What would you identify as the DNA here at SFS?

Mr. Tisanu Ratanarat: To properly understand the DNA of SFS Aviation Co. Ltd we must first look at our corporate colours which are: red, yellow and black. Both my father and grandfather studied and worked in Germany’s leading educational institutions and industrial companies such as Stuttgart University, Bosch and Mercedes Benz. It is this fearlessness and dedication to pioneering innovation in the German industrial sector that my father and grandfather brought back to Thailand to help build the nation. When my grandfather originally returned to Thailand after his time in Germany, he was involved in bringing the concept of a board of Investment to Thailand, building the first iron smelting plant, as well as the first cement plant and other industrial advancements which would bring value addition to Thailand.

 

It is with this spirit of defiance that spurred our company to become the first registered commercial helicopter operator in Thailand. However, our group is not solely focused on aviation. We were also the first Thai manufacturer of engine oil lubricant, which at the time, was an industry dominated by the big oil companies such as Exxon and Shell. When we first announced our entrance into this particular market with PTT as our first client, our offering was met with indifference and even disbelief that a Thai company could achieve the levels of efficiency and quality set by the leading global oil and gas companies. In order to prove our standards were comparable with the established players in the industry, we invited our competition and concerned stakeholders to an independent research laboratory to prove unequivocally the level of quality that our company upholds. After this successful demonstration, our presence in the market was not questioned anymore, as after all, scientific results do not lie.

 

We believe at SFS Aviation Co., Ltd. that, if you feel passionately enough about a concept, you must persevere to overcome negativity and challenges to reach your goals. Time and time again over the years our family and group of companies have shattered the stigma that Thailand is a nation resigned to importing technology from developed nations due to the lack of competency and belief domestically.

 

How have you implemented this defiant and pioneering spirit to bring about the newest developments in the company?

Mr. Tisanu Ratanarat: The key to success in the aviation industry especially in the oil and gas support sector is to focus on modifying processes and research capabilities in order to improve efficiency whilst reducing risk. This is particularly important in the aviation industry in developing countries, where the civil aviation authorities don’t necessarily have the adherence to systematic quality control that are expected globally in the offshore oil and gas aviation industry. Therefore, it falls on private companies to set the standard and to act as a benchmark for other companies and institutions to follow.

 

My priority is to continue the refinement of our in-house Aviation Safety Management System. We have integrated the system to incorporate all the flight operations and maintenance protocol required in the offshore oil and gas aviation sector which is the most demanding segment in the aviation industry.

 

Our next stage is to create further alliances with companies who share similar ambitions to us in other countries. When it comes to partnership, I believe we need to employ a more collaborative model than the form of partnerships implemented by older generations. It was common place here in Thailand that big industry players from developed countries around the world would come to Thailand, and form a partnership or joint venture purely for the purpose of circumventing tricky legislation. As a result these larger international companies used the local partner more as an agent and therefore knowledge transfer was kept to a minimum. Ultimately these kinds of exploitive relationships do not last long. This couldn’t be further away from the partnership strategy that we implement here. We want to improve the level of safety and compliance across the board in our industry. It is essential when partnering with other firms that we provide our expertise and the reliability of our integrated aviation safety management system to essentially create a safety blanket for the entire aviation industry. Many have said that to be so open with our technology with our partners in developing countries is a very risky strategy, however I believe that when our partners build and raise their own capabilities, we benefit too. In order to understand this mindset, it is important to explain our core values that make for long term business partnerships here in Asia. Successful business partnerships in South East Asia and most of the developing world are built upon trust and respect and not solely on commercial gain. Therefore, when fostering partners in other countries, it is important to provide our partners with a transfer of knowledge and not only a capital injection. In aiding our partners with our expertise, we gain our partners respect and trust which creates a long term bond and mutual success.

 

I’m willing to take these kind of risks when starting partnerships, as we solidify our position as experts and leaders in the market.

 

What would you identify as the trends and the new economic model in the offshore oil and gas aviation industry?

Mr. Tisanu Ratanarat: Right now the global offshore oil and gas aviation industry is not doing so well due to the overcapacity in production of aircrafts and human resources over the last 4 years, and now we are suffering for it. I feel this model is going to change drastically. Prior to the rapid oil price hike in 2012 many helicopter operators in this region wanted to enter into the offshore oil and gas aviation market, as the high barriers to enter such as the top quality and safety standards expected in the oil and gas industry meant that helicopter operators could earn high profit margins with relatively low competition. However, due to the violent fluctuations in oil commodity prices recently, we cannot rely solely on the oil and gas industry anymore. It is therefore prudent to spread risk and diversify into segments such as maintenance, repair and overhaul and training facilities.

 

Aviation industry players must have a buffer to weather these rapid cycles in the oil derivatives market. I get the feeling that the commodity cycles are going to continue to fluctuate faster than before because of the advancement of technology and the speculative nonphysical volume that drives the commodity price.

 

Talking about training facilities and maintenance, repair and overhaul services, do you believe this is an area Thailand should improve in order to position itself as an aviation hub?

Mr. Tisanu Ratanarat: If you look at Thailand’s success in the automotive and manufacturing sector I can see how we can leverage our nation’s competencies in these industries into positioning Thailand as an aviation hub.

 

I must admit though, that in order for Thailand to become an aviation hub of the region, we must overcome the challenges that we face in human capital development.

 

To become a pilot, it takes a significant amount of money and about a year to receive a commercial pilot license. But to become a fully capable aircraft engineer, it can take many years. An engineer is only as good as their on the job training and experience on specific areas of maintenance on a particular type of aircraft. Depending on availability and luck of a work schedule and aircraft utilization, an engineer trainee may have to wait one year before an opportunity to maintain a certain component on the aircraft comes up.

 

Considering the sheer volume of tourists arriving into Thailand each year and our central location in the region, we have the perfect location to have world class pilot training facilities to accommodate for the growth in the global air travel. On the subject of pilot training, we must ensure that locally based training facilities are providing the education and qualifications certificates to international standards by seeking the certification of the school by the top tier civil aviation authorities such as FAA and EASA so that Thailand’s graduate pilots can work for leading clients in any country.

 

We also needed to enhance the overall robustness and capabilities of the technical colleges here in Thailand. Some universities are just starting with some form of aviation faculties where other countries have already invested in specialised schools with on-site real aircrafts, real helicopters and simulators. With this is mind, in order for Thailand to leap frog other nations in our ability to train the human capital for this industry; an incremental step by step approach simply won’t overhaul our capabilities fast enough. We must collaborate between the private and public sector to sponsor the creation of world class training facilities for engineers. These facilities must have the latest technologies aircrafts, helicopters and virtual maintenance simulators to provide the students and eventually, the graduates with the necessary all round hands on experience, English vocational skills to be readily usable to succeed in the industry. If we achieve such an ambitious target, this would go a long way in supporting the government’s current plan to position the aviation industry as one of the 10 key growth driver industries spurring national economic development, the policy being spearheaded by the Deputy Prime Minister Dr. Somkid Jatusripitak’s economic team. It is clear, that while this plan is entirely possible, it will require significant capital expenditure. In this respect, we welcome international investors to collaborate with all stake holders in order to realise this vision.

 

What is your message to the international investment community to come to Thailand?

Mr. Tisanu Ratanarat: Overall the transport and logistics sector is an attractive investment destination. There are so many available airports and facilities that can be used for maintenance and manufacturing of parts. I have already mentioned about human capital development. Thai people just need the right internationally minded leadership who can help bring out the best of their team by understanding the Thai organization culture within the manufacturing sector. Many managers and investors come to Thailand and then engage in the fruitless activity of trying to make all of their Thai staff to change to their culture. This type of management style will result in a lot of frustration and not a lot of success. International managers should instead come here and do their best to integrate themselves within the Thai culture whilst imparting their best practices onto their team.

 

It is imperative to keep an open mind to find the right strategy in making international partnerships work. It is imperative that we continue to highlight the potential of the aviation industry in Thailand so that we attain the critical mass of support required to diplomatically guide the government and necessary stakeholders who would then return our aviation industry to the top class of international aviation safety and compliance. One such support network is the Aviation Subcommittee of the American Chamber of Commerce which supports the Government’s vision to strengthen Thailand’s position as an aviation hub of the region.

 

Right now we all need to work together and focus on reversing the downgrade that Thailand’s aviation sector received. Without this realisation, we cannot achieve any of the long term developments for this industry.

 

The human race has evolved to use our brains to create new efficient processes with less resources. This is why I strongly believe that our integrated quality and safety management system which is compulsory in U.S.A and Europe and is now an ICAO requirement on member countries (including Thailand), must be enforced on all of the Thai aviation industry as soon as possible. The safety management system act as a ‘safety blanket’ by ensuring self-auditing and self-improvement of aviation operations and maintenance processes. Moreover, the system features a continuous risk/safety data analysis dashboard, which will enable the Civil Aviation Authority’s to have a more complete, and timely inspection coverage of the aviation industries activities during safety inspection while reducing inspection frequencies. This provides one form of solution to the current lack of budget and insufficient number of qualified aviation inspectors while greatly enhancing safety. This is a win-win-win situation for everyone: the passenger, the country and the flight operator. We must stand together to embrace modernisation to continue to develop our nation.