Nok Air imagines shift to premium segment in rehab plan
Nok Air plans to add 5 billion baht in liquidity through a five-year rehabilitation plan starting next year as it prepares to shift segments to premium service.
Chief executive Wutthiphum Jurangkool said the airline plans to restructure the debt load of 5.15 billion baht via the rehabilitation process over five years.
Nok Air is the second airline after Thai Airways (THAI) to file a rehabilitation petition with the Central Bankruptcy Court, which it did on July 30, 2020. The airline submitted a rehabilitation plan on May 17, 2021.
Earlier this month, the majority of its creditors voted for the plan, which is scheduled for submission to the Central Bankruptcy Court again on Aug 26.
Tai Chong Yih, deputy chief executive at Nok Air, said the airline should start raising funds from shareholders worth 280 million baht during the second or third quarter next year.
The company doesn't need to rush as current financing is sufficient to cover operations for the rest of the year, he said.
The airline has 1,411 employees, but its rehabilitation plan calls for some departments to readjust their workforce to match the expansion, with six Boeing 737-800 jets added to its 22-aircraft fleet and a freighter aircraft for cargo service by September.
Mr Wutthiphum said Nok Air will reposition itself as a premium airline to avoid the price wars among low-cost carriers.
He said the repositioning is practical as its jets are considered the newest fleet, with larger legroom in the cabin.
Ticket prices will not be too much higher than its present ceiling price, said Mr Wutthiphum.
The airline will opt for various packages instead of hard promotions as in the past, he said.
"We hope passengers will choose to travel with Nok Air, which delivers high-quality services worth the price," said Mr Wutthiphum.
The airline will complete a rebranding process by the end of this year, he said.
In the one month after its shift to a temporary hub at U-tapao airport, Nok Air has operated 150 flights and carried 4,000 passengers, said Mr Wutthiphum.
Operations at U-tapao did not generate any profit as they averaged only 30 passengers per flight.
The decision to maintain service is for essential travel needs, such as medical purposes or serving people in the sandbox programme in Phuket.
Nok Air anticipates revenue rebounding to 2019 levels of around 20 billion baht by 2023.
Mr Wutthiphum said THAI, which formerly held a 13.28% stake in Nok Air, recently decreased its shares, the major shareholders remain unchanged.
According to THAI, the divestiture contributed 95 million baht and keeping a 10.46% stake in Nok Air is part of THAI's rehabilitation plan.