Published: 6/08/2010 at 10:05 PM
Online news: Transport
SURAT THANI: Just when Thai Airways International (THAI) has given the impression that its budget affiliate Nok Airlines has been too slow to seek growth, mainly to justify its joint venture with Tiger Airways to set up a new low-cost carrier in Thailand, Nok Airlines is doing exactly the opposite.
Nok’s board on Wednesday endorsed a major plan to add eight planes - four Boeing 737-800s and four ATR-72 turboprops - to its fleet currently comprising six Boeing 737-400s and two ATR-72s.
The board, chaired by Siam Commercial Bank executive chairman Vichit Suraphongchai, was also receptive to the plan by Nok’s management for the carrier to resume flying regional routes in the next one or two years.
The approval is seen as a big step forward for Nok since its recovery from its worst financial crisis three years ago caused by spiking oil prices, global economic turbulence and over-expansion which included the launch of international services to Vietnam and India.
It also dealt with the recent criticism from THAI, its largest shareholder with 39%, that Nok was too complacent with its status quo to support THAI’s plan to use it to fight off the growing dominance of Thai AirAsia, part of Malaysia-based AirAsia Bhd, in the lower market segment.
THAI’s management has made this issue, among others, an excuse to quickly create Thai Tiger Airways (TTA), a 51:49 joint venture with the Singapore-based low-cost carrier Tiger Airways, the agreement of which was hastily signed on Monday.
The TTA deal raised some eyebrows among industry executives and Thai politicians as the deal involved a Thai flag carrier and the Singapore-based low-cost carrier which counts among its major shareholders Singapore Airlines (SIA), an arch-rival of THAI, and the Singapore government investment arm Temasek, which bought Shin Corp from the family of fugitive former premier Thaksin Shinawatra in 2006.
But Nok chief executive Patee Sarasin insisted that the directives adopted by Nok’s board were not meant to counter THAI’s criticism and did not signal opposition to the formation of TTA, but rather were intended to support Nok’s own organic growth.
Nok’s fleet expansion will largely serve domestic air travel demand which has shown healthy growth and a good future outlook.
“Our objective, as we reaffirmed to THAI, has remained clear, that we will continue to consolidate our position in the domestic market, not repeating the past mistakes. We will not go to regional markets until we are ready, probably in the next one or two years,” Mr Patee told the Bangkok Post.
TTA is expected to start flying in the first quarter of next year with five new Airbus A320s leased from Tiger Airways before another five joining the fleet a year later.
TTA plans initially to operate eight routes out of Suvarnabhumi Airport to Phuket, Chiang Mai, Kuala Lumpur, Penang, Macau, Chennai, Shenzhen and Phuket-Chiang Mai.
According to Mr Patee, the four B737-800s, more advanced and with greater fuel efficiency than the B737-400s currently used by Nok, could start joining Nok’s fleet as early in October and remain in the fleet for a few years.
Nok has been in discussions with the aircraft leasing firm Gecas to lease the four B737-800 jets to serve its expanding domestic network and frequencies. Two of the current six B737-400s were leased from Gecas and the rest from THAI.
In addition, Nok is seeking to lease four additional French-made ATR72 propeller planes to operate on secondary domestic routes. Its two current ATRs are leased from the Thai flag carrier.
Nok reportedly made 445 million baht in net profit for the first half of this year. It is optimistic of earning up to 700 million baht for all of 2010, compared to 364 million baht last year.
“Our business is looking bright and secure,” Mr Patee said, assuring Nok will not be moved by the controversies involving the creation of TTA.
Bron: Bangkok Post