Thai Airways Sets Conditions for Cash Bailout of No-Frills Carrier Nok Air

 

BANGKOK – Thai Airways International has demanded Nok Air come up with a clear business roadmap before throwing another lifeline to save the no-frills carrier.

THAI chairman Ekniti Nitithanprapas made clear its position on Friday, requiring Nok Air to submit a credible rehabilitation plan and a clear strategy before THAI puts more money into it.

“It’s not only about injecting money. It has to come hand and hand with the rehabilitation plan. If the plan is approved, we’ll be ready to put in more money,” said Mr Ekniti, who is the Revenue Department director-general.

THAI, 68.3% owned by the Finance Ministry and other state agencies, holds 21.80% of the shares in the struggling low-cost airline, second only to Nuttapol Jurangkool, who controls a 23.77% stake.

Nok Air has been in the red due to stiff competition and high fuel jet costs. It booked a net loss of almost 2.8 billion baht in 2016 and 1.8 billion baht last year. For the second quarter of this year, it reported a loss of 856 million baht, according to the Stock Exchange of Thailand data.

Mr Ekniti said THAI would talk with the major shareholder of Nok Air on ways to bring the airline out of the red. It will also discuss the business strategies with the boards of Nok Air and THAI Smile, the other budget airline THAI has a stake in, he added.

Nok Air is run by acting chief executive officer Pravej Ongartsittigul after Piya Yodmani resigned on Aug 23 after only 11 months in charge.

The airline said Mr Piya decided to step down after all key senior executive positions had now been appointed.

THAI itself is not financially strong. It reported a net loss of 381.6 million baht in the first half of this year compared to a net loss of 2 billion in the same period last year. In 2017, it reported a net loss of 2 billion baht, compared to a net profit of 15 million in the previous year.

Shares of Nok Air Plc dropped 0.85% to 2.32 baht while THAI shares fell 1.5% to 13.10 baht on Friday.

 

By Wichit Chantanusornsiri
The Bangkok Post