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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