Nok Air unfazed by THAI merger proposal
text size

Nok Air unfazed by THAI merger proposal

Deal with Thai Smile does not affect rehab

Mr Wutthiphum says passenger demand is quite strong. Somchai Poomlard
Mr Wutthiphum says passenger demand is quite strong. Somchai Poomlard

Low-cost carrier Nok Air has reaffirmed that Thai Airways (THAI) still holds a 13.28% stake as the flag carrier prepares to merge with Thai Smile Airways.

Wutthiphum Jurangkool, chief executive of Nok Air, said even if a merger plan between THAI and Thai Smile Airways comes to fruition, it will not affect Nok Air's operations and the airline will continue to cooperate with THAI in terms of route planning.

THAI announced a plan to sell off its stake in Nok Air in 2021 as part of its rehabilitation plan to offload cost burdens.

However, Mr Wutthiphum said there are no signs the flag carrier will sell its shares to investors at the moment, while the plan to merge with Thai Smile Airways has yet to be clarified.

These circumstances are unlikely to impact Nok Air's rehabilitation plan, though the airline cannot guarantee it will finish the plan by the five-year deadline, or earlier as projected in the case of 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," said Mr Wutthiphum.

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

Nok Air plans to add six new narrow-body aircraft to the fleet and retire its four turboprop Q-400 planes from April 20 as the small aircraft cannot produce a healthy profit because of limited seats and higher maintenance costs.

A Nok Air Boeing 737 is seen at Don Mueang airport in a file photo. Krit Phromsakla Na Sakolnakorn

Most runways in Thailand have been expanded to serve jet aircraft, which are more cost-effective for flight operation, he said.

Mr Wutthiphum said the airline gained funding of 280 million baht from shareholders earlier this year to increase its liquidity.

Nok Air still has room to raise 600 million baht when it proceeds with its business plan and new investment for the fleet, he said.

Mr Wutthiphum said there is a possibility Nok Air will seek new partners overseas that can support the carrier's fleet, adding to its 14 aircraft as the airline still lacks wide-body aircraft for long-haul expansion.

He said a longer-range fleet would enable Nok Air to add more cities in China after it resumed three routes in the first quarter and plans to add six more destinations in July.

However, Mr Wutthiphum said its expansion in China faces a manpower shortage, as happened earlier in Europe, because of the rapid resumption of air traffic, with supply unable to catch up with demand. He said the Chinese market should have a significant rebound in June or July.

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

Do you like the content of this article?