NOK Presents Recovery Plan to Lift “C” Sign by Expanding Int’l Route and Reducing Cost

Nok Airlines Public Company Limited (NOK) has organized a Public Presentation to provide information to investors and related parties as the company has been remarked as “C” due to the company’s shareholders equity is less than 50% of paid-up capital for the financial statement of quarter 1/2019 ended on 31 Mar 2019.
The cause of “C” sign being hanged on NOK are both from external factor: increasing in Jet Fuel Price and fluctuation of USD Currency and internal factors: revenue improvement, cost efficiency, and on-time performance.

In such a situation, Nok Air has cautiously set a recovery plan including suitable guidelines to solve the problems and current situation, Nok Air has done some area which sees an improvement while some area is on process. The detail provides as follow:

Revenue Improvement
1) Shift marketing mix to focus on selling higher yield products
2) Arrangement of various business partners not limited to airline partners (Interline/codeshare)
3) International route expansion
4) Increase in ancillary revenue other than air fare revenue
5) Communicate on-time performance to customers
In the areas for improvement are no.1 and no.2 However no.3, no.4, no.5 are on process

Cost Reduction
1) Fleet reduction (ATR)
2) Increase usage by adding more night time operations
3) Further maintenance efficiency improvement
4) Re-modeling of Ground Handling Improvement
5) Fly longer flights by increasing international route
6) Fuel Management
In the areas for improvement are no.1, no.2, no.3 2 ATR was terminated from Nok fleet since Feb 2019 that lead to overall cost saving 6.4% mainly from aircraft lease cost and maintenance cost.
However, Nok Air can improve the efficiency of route production with current number of aircraft by adding more nighttime flight e.g. Don Mueang to Hiroshima (Charter flight) and other new China charter routes which can increase utilization per day per aircraft from 9.48 to 9.71 in Q4/2018 and Q1/2019.
No.4, no.5, no.6 are on working process

On-time performance
Nok Air has set up On-Time Performance Committee to address the issue specifically Reliability Award (Q400 model) from Bombardier
– Nok Air receive Airline Reliability Award (Q400 model) from Bombardier Commercial Aircraft in 2018
– The only airline from around the world
– 3 rd consecutive year

Moving Forward
There are 3 Fundamentals in moving forward
1) International expansion in order to increase revenue and reduce unit cost
2) Continue to drive partnership in order to increase network and scale (Interline/codeshare)
3) Continue to improve internal cost structure