Thai Airways is considering increasing its offer to acquire Krung Thai Bank's (KTB) 10% stake in Nok Air to gain greater control of the LCC (Bangkok Post, 28-Sep-2010). The carrier offered to purchase 5 million shares held by the bank for THB13 per share. However, the offer is well below KTB’s assessment, which is reportedly THB40 per share. Thai is looking to increase its stake in Nok from 39% to 49%. It stated it based the offer on Nok’s financial performance, with the carrier only moving into the black in the past year. Thai is yet to receive an official order from KTB on the offer, but the bank stated it plans to set its own price for the shares and make a counterproposal in early Oct-2010.
Thai Airways considers increasing offer to acquire stake in Nok Air
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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.