“Baby NOK” Can’t Fly! “Baby NOK” Can’t Feed Itself!

It has been five years since the first trade day of NOK Airlines Public Company Limited (NOK)’s shares, but it turns out that this baby bird still has not mastered its ability to fly. What is worse than a loss is the “C” sign given by the Stock Exchange of Thailand (SET) after NOK’s shareholders’ equity is lower than 50% of paid-up capital.

Problems occurred since NOK’s former CEO, Mr. Patee Sarasin, who administered the company with his artistic sense and with high self esteem. Not even a business plan has ever been presented to the higher-ups. The boards of directors were all fed up and said that only someone who has been favored could do something like this.

 

The first solution for NOK was a capital increase (1st) by having Mrs. Hathairat Chulangkul and Mr. Natthapol Chulangkul, Summit Group’s owner, as funding sources. On the other hand, Thai Airways International Public Company Limited (THAI), who is one of the major shareholders, did not offer any contribution for NOK. The reason might be due to an animosity with the current CEO or THAI (at that time) did not have enough to feed itself.

However, the amount of 1.2 billion baht from the capital increase did not strengthen NOK at all. Moreover, problems between the artist CEO and pilots also occurred, and critically caused the business to be even worse. The consequence from these problems caused customers to face with delayed flights, engine troubles etc., which created dissatisfaction and disbelief. Nok Air became the customers’ last resort.

 

There were no other solution for NOK but to get another capital increase (2nd). This time the major shareholder like THAI even declared that it would only contribute if the artist CEO resigned.

In the end, the artist CEO a.k.a. Mr. Patee Sarasin had resigned and THAI was willing to contribute its share in the 1.7 billion baht capital increase for NOK.

The new capital increase came with Mr. Piya Yodmani as the new CEO, who stated that NOK will turnaround! All investors were putting their hopes on this new CEO, who did not only make it worse, but downed the airline into the negative (loss)!

 

The major shareholders like Mrs. Hatairat Chulangkul could not help but offer another 500 million baht in bill of exchange to support Nok Scoot, a subsidiary of NOK, in hope of gaining more profit to support its parent company.

A huge loss on financial statement from NOK caused it to issue a restructuring business plan under the subject “More profit and lower operation cost”, while in search of new business partners to expand its network.

The new plan also came with a discourse of “NOK Selectable”, which is creating variety of services and merchandises for customers to select.

Maybe we need to give NOK a final push, but to think of a turnaround would be beyond our wildest dreams. For things not to be any worse than this is all we hope for.