Nok Air - History

History

The airline was established in February 2004 and started operations on 23 July 2004. It had 130 employees in March 2007 and around 600 in 2011. Nok Air began its first international service on 31 May 2007, with daily flights to Bangalore, India. The airline acquired landing rights to additional Indian cities (Chennai, Hyderabad and New Delhi).

Nok Air suspended its operations to Bangalore in November 2007 - the second low-cost carrier to suspend operations after Jetstar Asia Airways. According to Rajiv Bhatia, the General Manager for the Indian operations, this was due to non-availability of aircraft, and to allow service to other lucrative routes in South East Asia like Vietnam. However, according to sources in the travel sector, the suspension of operations may be due to the decrease in passenger load factor for Nok Air by 40%.

After its troubled international expansion, Nok Air has decided to focus on domestic services in Thailand. It is now the airline the serves the highest number of domestic routes within Thailand. This strategy has been successful. In 2010, Nok Air generated 618 million Thai Baht in net profit on revenues of 3.97 billion Thai Baht. The airline plans to add seven Boeing 737-800 aircraft and four ATR 72 turboprop aircraft in 2011.

Since its inception, Nok Air has been operating largely independently from Thai Airways International. This has led to some friction between the two companies along the way. To gain greater control of Nok Air, Thai Airways has tried to purchase the shares of other shareholders, notably Krung Thai Bank. However, although Thai Airways and Krung Thai Bank are both state enterprises under the control of the Ministry of Finance (Thailand), Krung Thai Bank refused to sell its shares in Nok Air to Thai Airways. The purchase would have lifted Thai Airways’ stake in Nok Air from 39% to 49%.