- CAPA Analysis
- Schedule Analysis
- Route Maps
- Print Summary
- IATA Code
- ICAO Code
- Corporate Address
- 183 Rajanakarn Building,
17th floor, South Sathorn Rd.,
Bangkok 10120, Thailand.
- Main hub
- Bangkok Don Mueang Int'l Airport
- Business model
- Low Cost Carrier
- Domestic | International
- Codeshare Partners
- Nok Mini
Location of Nok Air main hub (Bangkok Don Mueang Int'l Airport)
LCCs will continue to evolve into hybrids of the original core model. CAPA and OAG consider Nok Air fits the LCC profile and it is included in our reporting on this basis. Please note: when reporting for an airline is changed from or to LCC the historical data is not affected and it can lead to a distortion in the current reported data. Contact us if you have any queries.
219 total articles
39 total articles
Bangkok Airways is planning relatively ambitious fleet and network expansion over the next year as the independent full-service carrier looks to cement its position in the increasingly competitive Thai market.
The carrier plans to add five A320 family aircraft by the end of 2014 and is close to placing orders for new-generation turboprop and narrowbody aircraft. The fleet renewal and expansion could be partially funded by an initial public offering (IPO), which Bangkok Airways now aims to complete by the end of 2013 following a six-month delay.
The upcoming launch of three new low-cost carriers in Thailand, starting with Thai Lion on 04-Dec-2013, provides a potentially challenging backdrop to an IPO. But Bangkok Airways, which has been profitable for four consecutive years, is confident in the long-term viability of its boutique carrier niche. The carrier’s outlook remains relatively bright, boosted by an expanding portfolio of partnerships which will continue to provide high-yielding passengers that keep it largely out of the crossfire between LCCs.
Indonesia’s Lion Air Group is aiming to launch a new affiliate in Thailand by the end of 2013 with an initial fleet of two 737-900ERs based at Bangkok Don Mueang Airport. The new carrier, Thai Lion, will follow the low-cost model and, unlike Lion’s Malaysian subsidiary Malindo, provide an all-economy no-frill service.
Thai Lion will initially serve two international routes – Kuala Lumpur and Jakarta – and Thailand’s second largest domestic route, Bangkok-Chiang Mai. With Kuala Lumpur and Jakarta, Thai Lion will be able to leverage the hubs of its sister carriers.
The new carrier will compete primarily against Thailand’s two existing LCCs, Thai AirAsia and Thai Airways' low-cost affiliate Nok Air. Both are based at Don Mueang and serve Chiang Mai while AirAsia is the market leader between Bangkok and Kuala Lumpur and also serves Bangkok-Jakarta.
Southeast Asia continues to experience rapid LCC expansion even though some key markets are approaching saturation. The region’s LCC fleet is poised to grow by about 20% in 2013, approaching 500 aircraft at year-end. With some of the largest airline orders in recent years coming from ASEAN-focused LCC groups, rapid growth for the sector is assured for the medium to long term.
The LCC penetration rate within Southeast Asia is now above 50%, having steadily increased over the last 10 years from less than 5% in 2003. Even in the intra-Southeast Asia international market, which is about one-third the size of the region’s domestic market, LCCs now account for 50% of total seat capacity – a remarkable figure given that ASEAN has not yet moved to a single market concept like the EU.
Opportunities still remain for LCC market share gains in some countries, particularly Myanmar and Vietnam. These important pioneer markets have the lowest LCC penetration rates among the seven main ASEAN countries but LCC start-ups from both countries are expanding rapidly.
Vietnam’s VietJet Air has started to pursue a pan-Asia LCC group strategy, initially establishing a joint venture affiliate in Thailand. If successful, VietJet could climb up the rankings in the dynamic Southeast Asian LCC market, where it now accounts for a tiny 2% of capacity. But the risks are high as the Southeast Asian LCC market is already highly competitive, with 22 carriers and several more in the works.
The planned launch of Thai VietJet and the pursuit of joint ventures in other ASEAN countries represent an ambitious move given that VietJet is only 18 months old. VietJet has quickly established itself in Vietnam but its brand is an unknown in other parts of Asia, which will make it a challenge to overcome the first mover advantages of AirAsia, Jetstar, Lion and Tiger.
In its first venture, in Thailand, VietJet will face stiff competition from two well-established LCCs, Thai AirAsia and Thai Airways affiliate Nok Air. Lion also plans to launch a joint venture in Thailand, a market which is growing but is unlikely able to support so many LCCs.
Nok Air is well placed to build on its strong position in the Thailand domestic market and fend off potential new competitors following an initial public offering which raised THB4.875 billion (USD156 million). The Thai Airways affiliate will use the proceeds to expand its fleet to at least 30 aircraft by the end of 2015 with a focus on growing existing domestic routes.
Nok already offers Thailand’s largest domestic network with 22 destinations and 24 routes. About half of its routes are served with turboprops, giving the hybrid carrier a leading position in Thailand’s regional market. Overall Nok is the third largest domestic carrier in Thailand behind Thai Airways and Thai AirAsia, but has been rapidly closing the gap with Thailand's largest LCC.
Nok faces bigger challenges in establishing an international presence but at least for now will primarily focus on the domestic market, where there continues to be growth opportunities but also intensifying competition. Nok’s expansion into the international market will be gradual and modest with a focus on niche routes.
Lion Air has embarked on the first phase of an aggressive international strategy which is starting to see the fast-growing airline group diversify away from its roots in the Indonesian domestic market. The Mar-2013 launch of an affiliate in Malaysia, Malindo Air, is expected to be followed by joint ventures in other Asian markets, starting with Thailand. A low cost, but hybrid operator, Lion over time will also look to grow its now tiny international network from its home market of Indonesia.
Internationalisation with a focus on Southeast Asia is the right strategy for Lion as it cannot continue to rely almost entirely on the Indonesian domestic market. Indonesia has emerged as one of the world’s largest and fastest growing emerging markets. But with nearly 600 aircraft on order Lion needs to hedge its bets and not limit its growth to Indonesia, particularly given the threat that growing infrastructure constraints could lead to slower growth over the medium to long-term.
Lion, however, faces huge challenges as it starts to dip its paw in other markets. Establishing a strong brand and distribution network outside Indonesia will be Lion's biggest challenge. Competition in any new market Lion enters will be fierce as it will not have the first low cost mover advantage it had in Indonesia. Pan-Asian low cost airline groups like AirAsia, Jetstar and, to a lesser extent, Tiger, already occupy the high ground.
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