Thai Airways has cancelled plans to acquire an additional 10% stake in Nok Air from Krung Thai Bank (KTB), as the bank’s asking price for the shares was too high (Bangkok Post, 02-Dec-2010). KTB reportedly asked for THB44 per share of its 5 million share stake, compared with the THB13 per share offered by Thai. KTB stated its proposed price reflected the true value of the carrier, after its significantly improved performance in 2009 suggests future growth potential. Nok expects to report a net profit of THB700 million this year, on THB3 billion in revenue. It expects a lower net profit of THB200 million in 2011, on THB 4 million in revenue, due to higher fuel costs.
Thai Airways cancels plans to acquire Krung Thai Bank stake in Nok Air
You may also be interested in the following articles...
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.