Nok embarks on expansion

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BANGKOK, 24 August 2016: Nok Air says it will open international routes over the next two years with a focus on China and India, according to the most recent Centre for Asia Pacific Aviation’s recent analysis.

Established in 2004, Nok Air embarked on expansion in 2007, first to India (Bangalore) with plans to fly to China and Japan, but had to re-evaluate options due to cash flow challenges and rising fuel costs. It has since concentrated entirely on domestic services in Thailand serving 24 destinations.

However, this year has seen it return to some routes in Southeast Asia, starting with a three daily service from Bangkok’s Don Mueang Airport to Yangon in Myanmar.

inside no 1It has also launched a four weekly service to Hanoi, the capital of Vietnam and a twice daily service to Ho Chi Minh City the country’s main commercial hub.

In 2014, the airline entered into a partnership with Singapore Airline’s Scoot that now offers a combination of Nok Air flights on domestic sectors that connect seamlessly with Scoot’s flights from Bangkok to Singapore with check-through and passport checks at the point of departure.

The routes are: Chiang Mai – Singapore; Chiang Rai – Singapore: Udon Thani – Singapore; Ubon Ratchathani – Singapore; Nakhon Si Thammarat – Singapore.

CAPA said the airline needs a bigger international operation to diversify its business, improve profitability and unlock a new phase of growth that is not possible if it concentrates entirely on the limited domestic market in Thailand.

China expansion is the priority in 2017 followed by India in 2018, served by Nok’s new fleet of 737 MAX 8 aircraft and supported by a potential new Indian partner, CAPA said.

The China expansion initially will focus primarily on charters to tap the huge travel agency group tour market. This year, Thailand will welcome 10 million Chinese tourists up close to 8 million in 2015.

To start the ball rolling on China flights the airline will start flights to Kunming the capital of Yunnan province this November.

CAPA quoted Nok CEO, Patee Sarasin, saying charter series to China will be confirmed during the last quarter and for 2017, starting with Linyi and Wenzhou.

Charters are less risky than scheduled services as they are based on pre-sales guaranteed by tour operators in China that have a strong client base.

Flights to India are not likely to start until 2018.

“Charter flights are not as common in India and therefore we will need to commit to scheduled flights from the beginning,” the airline CEO told CAPA.

To build its brand in India Nok is now talking to a potential Indian airline partner.

Nok will add to its cover of Southeast Asian destinations region flights to Mandalay in Myanmar using either a Boeing 737-800 service from Bangkok and a Q400 service from Chiang Mai.

For full report visit http://centreforaviation.com/analysis/thailands-nok-air-to-restore-domestic-capacity-but-focus-expansion-on-china-and-india-297775.