Recorded at CAPA Global LCC Summit, 1-2 Mar 2018

Patee Sarasin Talks About His Next Venture

Patee Sarasin was the CEO of Thailand’s Nok Air from its launch in 2004 until late 2017. He was one of the founders behind Nok and NokScoot, a joint venture long haul low cost airline with Singapore Airlines subsidiary Scoot that launched in 2015. Mr Sarasin is now working to establish a new travel company that will not be an airline but will work closely with airlines. He plans to formally launch the new company in London in Jul-2018, at which time more details about the product and positioning will be announced. Mr Sarasin also gives his views on market conditions in Thailand’s highly competitive airline sector and the future for Nok and NokScoot.


Patee SarasinDDG is a holding company where I'm going to be launching a whole new brand of travel company. I can't tell you all the details yet because it's highly confidential and it's totally blue ocean. And it's going to be the company that integrates between the airline business into the traveling itself in such a way that we're not taking away the yield of the airlines. So in other words, we're going to ensure that we know exactly the constraints and the opportunities you can use while doing this.

It's the total package. You're gonna see it around July, hopefully. We're going to launch that particular brand in July, and it's going to be quite interesting mode when this happens because it's gonna benefit airlines, a lot of beneficial to the airlines itself.

It's a global company. It's going to be launched all over the place. It's going to be based in ... That's why we're launching in London. It's gonna be a total global company. And have a lot of AI's involved in it, and the state-of-the-art at the moment, so it's going to be quite good.

The key element that is hampering the aviation industry is not the fact that it's not popular, but the fact that the capacity growth is way too fast for the market growth to follow. So at the end of day the price war started to loom, basically, and that's what's causing the issues of the yields dropping and hence lots of airlines are not making money.

Now Air Asia is a different ballgame because the fact that they are ... more international appeal now. And they're flying all over the place, across Asia. So their advantage is the fact that they're not dependent only on the Thailand as a country itself or domestic market.

No era is too slow in terms of expanding. We penetrate into China, yes, quite successfully as a scheduled charter. But still, it's not enough in terms of the revenue-share percentage in order to make sure that the company is going to be successful given the fact the domestic market, the yields has dropped at least 10 to 15 percent on an annual basis.

I have to get credit to Piya, the new CEO. He surely believes that to unbundle everything. I actually do not quite agree to that particular concept because what it does it drove us into the red ocean as a me-too comparatively to Air Asia or the likes. So that particular part, I did not quite agree on that particular move.

Now, five, three months forward from that launch of their product, what you find is that a lot of people are buying the cheap tickets and not really ... instead of a revenue, although it's much, much higher today, still does not substantiate if we had the original construct of the fares, the structure that we had before. So that's a bit of a ... For me it's a bit of a disappointment there. But that's the way it goes. The CEO says so.

For my participation in the Nok Air is absolutely zero in terms of official. But what I try to do is ... Obviously all my staff, my team is still there, feeding information that I think is necessary sometimes to give a warning or an advice to Piya, the new CEO. He was my number two all along so it hasn't been difficult to communicate that to him. And to convince also the shareholders as well, because 43% of the shareholders today are not airline-business-driven.

I think NokScoot's gonna do very, very well, I'm gonna be very honest with you, into markets like Japan, Korea, or even China, the slots are going away, so the wide body plays a bigger role in terms of driving that. And also the cost-per-unit, the [inaudible 00:04:12] will be much, much lower, against a competition who has 737-900's maybe. So you can see where the competition is going to be, and I think NokScoot will do very well in that market.

Singapore Airlines, they're very professional. They have the mandate and they have the way that they operate. You can see that it's absolutely professional. And more to that, they're friends as well. So when we work with Scoot and SQ or whatever, they're more like friends than anything else at the moment, and we can see it going forward that way.

For Nok Air, with Thai Airways, well, like I said to you in the congregation over there that I had some issues over time with the Thai Airways. The management structure is always different. Every time the management change we go through issues in different ways, sometimes positive, sometimes negative. So the consistency has never been there. So that's where ... puts us in a still spot rather than moving forward. And us being a public company now, the ownership is more of a public as well so it's even more difficult in terms of trying to create innovation and things like that. So there's a lot of ... And of course because of the fact that we've been losing money for the next three to five years or whatever, it's been sort of a hampering on us as well on this issue.

I haven't been in aviation ... there for only five months. I'm pretty much still in it. I see a lot of things that I didn't see when I was running an airline. I see a lot of travel industry, how it evolves. And I think I'm always wondering why everybody around the airlines always making money and airlines don't, and it's taking advantage of it, although, you know ... So I think that's where I am at the moment, and I want to create something that airlines can benefit from what I'm going to do.

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