Nok Air is raising 4.88 billion baht in funding under a rehabilitation process to prepare for recovery while eyeing the opportunity to operate a new hub at Suvarnabhumi airport.
"The airline plans to add six more Boeing 737-800 aircraft to the current fleet of 17 planes this year and next. However, this will depend on demand, particularly from China and neighbouring countries," said Nok Air chief executive Wutthiphum Jurangkool.
Nok Air received approval from the Central Bankruptcy Court on Nov 29, 2021 to continue with its rehabilitation plan, which the airline outlined to help it post a profit by 2024 as part of a recovery.
Under the five-year rehabilitation plan, the airline will start raising funds from shareholders worth 280 million baht, followed by a 600-million-baht increase in capital next year to support cash flow, said Tai Chong Yih, deputy chief executive at Nok Air.
The final amount of 4 billion baht would be received before the rehabilitation period comes to an end in 2026. Some 2.7 billion will be returned to shareholders while the remainder will be used for fixed financial statement and be preserved as cash flow.
He said overall debt under the rehabilitation stood at 4 billion baht as the airline adjusted aircraft contracts with lessors to reduce the fleet from 22 to 17 aircraft by returning five Q400 aircraft.
Meanwhile, maintenance contracts also received debt haircuts in the form of reductions of around 40% and 15% on engine maintenance.
Mr Wutthiphum said Nok Air is considering an expansion to Suvarnabhumi airport, which is contending with a less severe price war and still has good time slots as other airlines reduce their fleets. The airport could help expand the market to international arrivals seeking domestic connections.
The airline can introduce domestic routes to Chumphon, Ranong and Sakon Nakhon, however there is no official timeline for the plan.
At Don Mueang airport, Nok Air will offer a 250-square-metre airport lounge at the domestic terminal, starting from this high season.
Teerapol Chotichanapibal, Nok Air chief commercial officer, said the airline would add frequency to the existing routes, including Ho Chi Minh City from daily to double-daily flights and Yangon with 10 flights a week from four flights in the second half.
Nok Air also operates flights to Nanning and Zhengzhou in China under a limited quota of one flight per month for each city.
Mr Teerapol said flight resumptions would largely depend on travel restrictions and permissions to fly.
The airline is awaiting traffic rights in India and the further relaxation of restrictions in Japan.
During the first six months, the airline carried 1.8 million passengers and set a target of 6 million passengers this year, compared with 8.25 million in 2019.
Nok Air plans to extend a memorandum of understanding with local tour firms to operate the Betong route from August to October, he said.
The Nakhon Ratchasima-Chiang Mai route will start in August and the airline is working on the possibility of reviving the Mae Hong Son-Chiang Mai route for this winter season.