Nok Air's outlook improves after a challenging 2Q2014 as Thailand stabilises and NokScoot launches

Thai low-cost carrier Nok Air is expecting a recovery in 2H2014 after incurring a rare loss in 2Q2014. Political instability and intense competition made it virtually impossible for any Thai carrier to be profitable in 2Q2014. But Nok is optimistic market conditions are improving, enabling its existing short-haul operation to again be profitable in 2H2014.

The expected recovery of the Thai market also bodes well for its new long-haul low-cost joint venture carrier NokScoot, which plans to commence operations in 4Q2014 with two-class 777-200s operating routes to North Asia. Nok is also preparing to launch services to Vietnam, which will become its second international market after Myanmar.

Nok is currently the largest carrier in Thailand's domestic market, which continues to grow rapidly this year despite the political turmoil but has become intensely competitive. Regional international expansion and the launch of NokScoot will unlock new growth opportunities for the until now domestic-focused 10-year-old LCC.