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Farmer · 09-11-2006, 08:10

Mer fra Thailand og LCC. Aner vi en liten SASBraathens/SAS paralell her ?

Nok Air ruffles feathers in parent's nest
Independent style irritates THAI execs

The little yellow-beaked budget carrier Nok Air appears to have come of age and, in the process, become too rebellious for its mother bird, Thai Airways International (THAI).

Executives of the national carrier are said to be increasingly irked by the way Nok, meaning bird in Thai, is conducting its business totally independently and against its interests.

''Nok Air has not worked to fit into the role and strategy that THAI laid down when the initiative that led to creation of the low-cost carrier (LCC) was adopted back in early 2004,'' said a senior THAI executive who asked not to be named.

''Nok Air hardly informs us what it wants to do, nor does it seek our opinions on issues that may affect our business,'' he said.

THAI, which holds the largest stake in Nok Air, at 39%, had hoped that Nok would support its operations and corporate goals in the way a subsidiary normally helps its parent company.

The national carrier would like to see Nok work with it to help protect its market share on domestic and regional routes, particularly against other LCCs.

THAI also wants to see Nok Air become more responsive in taking over low-traffic routes THAI hands over to it.

Lately, senior THAI executives have been unhappy with Nok Air joining two other LCCS _ Thai AirAsia and One-Two-Go _ in calling for the government to return LCC operations to the old Don Muang airport from Suvarnabhumi.

THAI has been against the idea for fear that the LCCs would have cost advantages and take away significant business, particularly domestic flights, from it.

THAI has sought to better protect its domestic-flight business, which is being eroded by budget carriers that offer 30-40% lower fares. The domestic operation generates 11% of THAI's global revenue.

''It looks like we cannot rely on Nok Air to fight against the budget carriers,'' said a senior THAI executive.

That explains why THAI is keen to pursue plans to set up another subsidiary, tentatively called Euarng Luang, or Royal Orchid in English, to spearhead its fight against other budget carriers if the government decides to allow them to move back to Don Muang.

Conceptually, the new airline would operate domestic routes and flights to neighbouring countries, taking over certain routes currently operated by THAI.

But Euarng Luang will not see the light of day if all airlines continue to operate through Suvarnabhumi, because THAI management sees that all carriers would be competing on the same cost basis.

THAI may have to review its policy of leasing its aircraft to Nok Air and retaining the fleet of small jets _ eight Boeing 737-400s _ to support Euarng Luang.

All of Nok Air's four 149-seat Boeing 737-400 jets and a 66-seat ATR-72 propeller plane are leased and maintained by THAI. Nok now operates 60 flights a day on 10 domestic routes.

Nok Air plans to launch its first overseas route _ from Bangkok to Bangalore, the Silicon Valley of India _ early next year.

But THAI executives stopped short of saying whether their unhappiness with Nok Air and the creation of Euarng Luang would lead to the flag carrier withdrawing from Nok Air. Nok Air's other shareholders are CPB Equity, SCB Securities, Krung Thai Bank, Dhipaya Insurance Plc and the Government Pension Fund.

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09-11-2006, 08:10	#2
Farmer ScanFlyer Crusty Join Date: Sep 2004 Posts: 3,619	Re: Stor LCC vekst i Sydøst Asia Mer fra Thailand og LCC. Aner vi en liten SASBraathens/SAS paralell her ? Nok Air ruffles feathers in parent's nest Independent style irritates THAI execs The little yellow-beaked budget carrier Nok Air appears to have come of age and, in the process, become too rebellious for its mother bird, Thai Airways International (THAI). Executives of the national carrier are said to be increasingly irked by the way Nok, meaning bird in Thai, is conducting its business totally independently and against its interests. ''Nok Air has not worked to fit into the role and strategy that THAI laid down when the initiative that led to creation of the low-cost carrier (LCC) was adopted back in early 2004,'' said a senior THAI executive who asked not to be named. ''Nok Air hardly informs us what it wants to do, nor does it seek our opinions on issues that may affect our business,'' he said. THAI, which holds the largest stake in Nok Air, at 39%, had hoped that Nok would support its operations and corporate goals in the way a subsidiary normally helps its parent company. The national carrier would like to see Nok work with it to help protect its market share on domestic and regional routes, particularly against other LCCs. THAI also wants to see Nok Air become more responsive in taking over low-traffic routes THAI hands over to it. Lately, senior THAI executives have been unhappy with Nok Air joining two other LCCS _ Thai AirAsia and One-Two-Go _ in calling for the government to return LCC operations to the old Don Muang airport from Suvarnabhumi. THAI has been against the idea for fear that the LCCs would have cost advantages and take away significant business, particularly domestic flights, from it. THAI has sought to better protect its domestic-flight business, which is being eroded by budget carriers that offer 30-40% lower fares. The domestic operation generates 11% of THAI's global revenue. ''It looks like we cannot rely on Nok Air to fight against the budget carriers,'' said a senior THAI executive. That explains why THAI is keen to pursue plans to set up another subsidiary, tentatively called Euarng Luang, or Royal Orchid in English, to spearhead its fight against other budget carriers if the government decides to allow them to move back to Don Muang. Conceptually, the new airline would operate domestic routes and flights to neighbouring countries, taking over certain routes currently operated by THAI. But Euarng Luang will not see the light of day if all airlines continue to operate through Suvarnabhumi, because THAI management sees that all carriers would be competing on the same cost basis. THAI may have to review its policy of leasing its aircraft to Nok Air and retaining the fleet of small jets _ eight Boeing 737-400s _ to support Euarng Luang. All of Nok Air's four 149-seat Boeing 737-400 jets and a 66-seat ATR-72 propeller plane are leased and maintained by THAI. Nok now operates 60 flights a day on 10 domestic routes. Nok Air plans to launch its first overseas route _ from Bangkok to Bangalore, the Silicon Valley of India _ early next year. But THAI executives stopped short of saying whether their unhappiness with Nok Air and the creation of Euarng Luang would lead to the flag carrier withdrawing from Nok Air. Nok Air's other shareholders are CPB Equity, SCB Securities, Krung Thai Bank, Dhipaya Insurance Plc and the Government Pension Fund. Link __________________ Upcoming flights: En liten flyoversikt siden 29/7-2006.. Simplicity is the ultimate sophistication, Leonardo Da Vinci