Thai Airways planning to increase its stake in Nok Air to up to 60%
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.