Thai Airways International insists on paying Krung Thai Bank THB30 each for shares in Nok Air, against THB44 proposed by the bank (The Nation, 25-Jan-2011). THAI president Piyasvasti Amranand – commenting yesterday on the progress towards buying a 10% stake in SkyAsia, operator of Nok Air, from state-owned KTB – said the company had not received any reply from the bank. Mr Amranand added Nok Air has recently revised down its forecast for results in 2011, affected by rising world oil prices. The negotiations for the share purchase are expected to conclude shortly. The next talks are expected on 26-Jan-2011. Mr Amranand added that if the purchase goes through, THAI shares would increase from 39% to 49%.
Thai Airways insists on THB30 offer for Nok Air stake
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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.