Thai Airways Board of Directors stated Krung Thai Bank has agreed to sell its 5 million shares in Nok Air at TJB30 (USD 0.98 cents)/share, lowering the previous proposal from THB40/share (The Nation/Bangkok Post, 14-Jan-2011). The Board acknowledged the new proposal and allowed the management to proceed with the negotiation this week. Earlier, Thai Airways had proposed a sale price of THB13/share while KTB has proposed to sell the 10% stake for THB44/share. Thai Airways is seeking a larger stake in Nok Air to strengthen its controlling power in the LCC. The purchase would lift Thai's stake in Nok Air from 39% to 49% at a cost of THB150 million (USD4.9 million).
Krung Thai Bank to sell 4 million shares in Nok Air for THB30/share
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Thai Airways regional connectivity Pt 2: Thai Smile international expansion is a strategic necessity
Thai Airways' regional full service subsidiary Thai Smile is expected to accelerate international expansion over the next year as Thai Airways transitions to an all-widebody fleet. Adjustments in the group’s dual brand strategy are also possible as Thai Airways and Thai Smile could benefit from much closer integration.
Thai Smile currently only operates four international routes and allocates 90% of its seat capacity to the domestic market. However, the airline is poised to take over Thai Airways’ four remaining international narrowbody routes and should be used to expand the group’s presence in secondary cities in China, India and ASEAN.
This is the second part of a report on the Thai Airways Group's regional international network and strategy. The first part looked at how the group has fallen behind its rivals in Southeast Asia – particularly the Singapore Airlines Group – in improving regional connectivity. In this second part CAPA focuses on the strategy for Thai Smile and how the Thai Airways group could finally start to use Thai Smile to bolster regional connectivity.
Thai Airways falls behind Singapore Airlines Group with regional connectivity: Part 1
Thai Airways will enter a new phase over the next year as it completes its transformation plan and starts to consider potential options for resuming expansion. Regional international growth is the most logical area to focus on, using the group’s full service short haul subsidiary Thai Smile.
Thai Smile currently only serves four international destinations. As Thai Airways mainline transitions to an all-widebody fleet the group will need a much larger international network from Thai Smile.
Thai Airways should also examine better integration of Thai Smile, following the model used by Singapore Airlines (SIA) with its full service regional subsidiary SilkAir. The current setup, including separate reservation systems and sales teams, is far from ideal and must be improved in order for the Thai Airways Group to close the gap with the SIA Group in key markets such as China, India and ASEAN.