Nok Air Maintains Autonomy Amid Thai Airways Merger Plan

Budget airline Nok Air has reiterated that Thai Airways (THAI) continues to possess a 13.28% share even as the national airline plans to consolidate with Thai Smile Airways.

Nok Air’s CEO, Wutthiphum Jurangkool, stated that should a merger between THAI and Thai Smile Airways occur, it would not influence Nok Air’s operations, and the airline would maintain collaboration with THAI concerning route development.

In 2021, THAI revealed its intention to divest its Nok Air stake as a component of its recovery strategy to reduce financial strains.

Nonetheless, Mr. Wutthiphum mentioned that there are currently no indications that the national airline will offer its shares to investors, while the merger plan with Thai Smile Airways remains undefined.

These situations are improbable to affect Nok Air’s recovery plan, although the airline is unable to assure completion within the five-year timeframe, or earlier as anticipated for THAI, he said.

“Regarding the pace of rehabilitation, fuel cost remains higher than in 2019 and the exchange rate and airplane restoration must be factored in,” Mr. Wutthiphum noted.

“Passenger demand is quite strong, but it depends on how fast we can increase the jet fleet to cater to that growth.”

Nok Air aims to introduce six new narrow-body aircraft to its fleet and retire its four turboprop Q-400 planes from April 20, as these smaller planes cannot yield sufficient profit due to restricted seating and increased maintenance expenses.

Most of Thailand’s runways have been extended to accommodate jet aircraft, which are more cost-effective for flight operations, he explained.

Mr. Wutthiphum stated that earlier this year, the airline secured funding of 280 million baht from shareholders to boost its liquidity.

Nok Air has the capacity to raise an additional 600 million baht as it proceeds with its business strategy and new investments for the fleet, he mentioned.

Mr. Wutthiphum revealed that Nok Air might explore new international partners to support the carrier’s fleet, supplementing its 14 aircraft as the airline currently lacks wide-body planes for long-haul expansion.

He noted that a longer-range fleet would permit Nok Air to extend its services to more cities in China after restarting three routes in the first quarter and scheduling six additional destinations for July.

However, Mr. Wutthiphum indicated that their growth in China faces a workforce deficit, similar to what occurred earlier in Europe, due to the swift resumption of air traffic and supply lagging behind demand. He anticipated the Chinese market to experience a substantial recovery in June or July.

Nok Air is considering new routes to Ahmedabad, Gaya, and Varanasi in India, as well as Taiwan and Singapore this year, Mr. Wutthiphum said.