Nok Air eyes stakes in rivals
Nok Air finished debt negotiations with 50% of creditors in the buildup to the rehabilitation process while its biggest shareholders want to acquire stakes of competitors to control the aviation market.
"We will likely submit the rehabilitation plan to the Central Bankruptcy Court on March 15 as planned. But we also have to learn from the precedent case of THAI [Thai Airways International] which must proceed the rehabilitation plan to the court by the deadline on March 2," said Nok Air chief executive Wutthiphum Jurangkool.
"Some issues need to be settled. For instance, whether our debts should include future obligations, such as airplane leasing contracts for upcoming years," he said.
In the meantime, his family already proposed to two airlines in Thailand to acquire stakes in that will enable them to manoeuvre the market more easily in the future.
"We cannot disclose the name of the two airlines under negotiation, but they are among six that joined forces with us in establishing the Airlines Association of Thailand [AAT] recently," he said.
Besides Nok Air, the founding members of AAT are Bangkok Airways, Thai AirAsia, Thai AirAsia X, Thai Smile Airways, Thai Lion Air and Thai Vietjet.
At present, the Jurangkool family hold 75% of Nok Air's shares.
Debt-ridden THAI, which owns 13.28% of Nok Air, announced last week that it will sell those shares to increase liquidity.
Besides Nok Air, THAI is also under pressure to detach Thai Smile Airways -- one of its affiliated airlines -- to offload a massive burden.
Mr Wutthiphum said the Nok Air executive board hasn't decided to buy the lot back from THAI as it has to consider the conditions.
However, this is the right time to invest in the aviation business as the acquisition cost is inexpensive, while the long-term future of the industry is still promising, he said.
Mr Wutthiphum said the new acquisition via family members combined with existing business must give them economies of scale to correct the average ticket price as competition is now overheated.
Nok Air filed a petition against price cutting for low-cost airlines with the Office of Trade Competition Commission at the end of last year, hoping to stop a price war.
He said all airlines are waiting for the answer to the soft loan request from the government.
In the meantime, each airline has to raise funds to survive in the long run.
Domestic routes starting to see more traffic, but the recovery pace is slow compared with the pre-pandemic level.
Nok Air expects to achieve a 70% load factor by April which is lower than the peak of 95% in the same period 2019.
The 22-aircraft fleet was being used in the past month but with utilisation of only 4 hours per day.