Thai Airways reportedly plans to increase its stake in Nok Air to up to 60% in the next two months, to exercise more control over the LCC (Bangkok Post, 17-Feb-2010). Thai currently has a 39% stake in Nok, and plans to fund the stake increase through its own capital, to increase its direct stake to 49%, while its provident and employees’ welfare funds would acquire the remaining 10% and 11% stakes, respectively. Thai itself will only acquire up to 49% of Nok, so that the LCC is not forced to become a state enterprise. Thai plans to increase cooperation with Nok, and ultimately hand over the majority of its loss-making domestic routes to the LCC. Approximately nine of Thai’s 12 domestic routes are no longer profitable due to high costs and increased competition from LCCs, including Thai AirAsia.
Thai Airways planning to increase its stake in Nok Air to up to 60%
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Thai Airways regional connectivity Part 3: Thai Smile to launch Chandigarh, Jieyang & Zhengzhou
Thai Airways' regional full service subsidiary Thai Smile plans to launch 10 international routes by the end of 2016 and expand its international network from only four to 15 destinations. The expansion is made possible as Thai Smile takes over all four of the A320s currently operated by Thai Airways and improves the utilisation of its existing 16 aircraft.
Chandigarh in India and Jieyang and Zhengzhou in China will be new destinations for Thai Smile and the Thai Airways Group. Thai Smile is also taking over two other Indian destinations from Thai Airways – Gaya and Varanasi – along with one other in China, Chongqing. Thai Smile will also start operating alongside Thai Airways to Penang in Malaysia, Phnom Penh in Cambodia and Vientiane in Laos.
In addition Thai Smile is planning to resume services to Mandalay in Myanmar and Luang Prabang in Laos. All the new and resumed routes will expand the Thai Airways Group network to 14 international destinations in Southeast Asia, 10 destinations in China and nine in India.
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.