4-Aug-2010 11:00 AM

Thai Airways to proceed with Tiger Airways JV, as Nok Air unable to expand

Thai Airways Chairman, Ampon Kittiampon, stated the carrier is proceeding with its Tiger Airways JV as Nok Airlines was unable to develop a marketing strategy to expand its operations and was not in a position to expand internationally (bangkokpost, 03-Aug-2010). He added that he is confident that Thai Airways' THB100 million investment would be returned within three years. He also commented that there has been no conflict between Thai Airways and its subsidiary. He stated the carrier's market share has fallen due to LCC competition, with the number of Thai Airways services within the region falling from 40% to 10% of the market, with domestic marketshare falling from 50% to 30%. He added that if there would be no improvements over the next two years the impact on THAI will be severe.

Thai Airways: "THAI had been trying discuss a plan to raise its holding in Nok Air from 39% to 49% so it would be more competitive in the low-cost market, but Nok Air was unable to propose a strategy. This is why the THAI board is finding ways to develop its own low-cost airline. We (THAI) have had talks with Nok Air CEO Patee Sarasin but Nok Air doesn't want to develop itself into a super low-cost airline ... THAI will press ahead with the joint venture as the co-investment process is in line with the law. As a listed firm, THAI has already reported its new investment plan to the Stock exchange of Thailand. As a state enterprise, the national flag carrier has also proceeded as required by the state enterprise law," Ampon Kittiampon, Board Chairman. Source: Bangkok Post, 03-Aug-2010.

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