Nok Air starts rehabilitation process

Low-cost carrier Nok Air has got permission from the Central Bankruptcy Court to commence a rehabilitation process. 

Though Nok Air can reduce cumulative losses, the airline has been suffering from an outbreak that has grounded the fleet for months, "said Kasemsant Weerakun, Nok Air's director, adding that without new revenue, the company has to pay operational costs. 
"The court is competent to rehabilitate the business of the firm. For us, this is the only path."

Nok Air, which has got 26 billion baht up in debt, filed a petition for rehabilitation with the court on July 30, becoming the second local carrier after Thai Airways doing so.

One of the plan's primary objectives is to amend the aircraft leasing and maintenance contracts, which account for 40 percent of the airline's total expenses. 
The company held talks with aircraft lessors after the petition was accepted by the court, who subsequently agreed to ease the leasing conditions, such as by authorizing the airline to make rental payments based on the aircraft's operating hours. 

The company plans to launch new routes, including domestic flights between Chiang Mai and Mae Hong Son, and foreign flights to other ASEAN countries, such as the Philippines and the Middle East.
 
Nok Air also plans to work with business partners, including car rental companies, to expand the customer base. 

The rehabilitation and ensuing automatic stay mean that no debt repayments have to be made by the airline. 

The load factor of Nok Air is 60-70 percent on average. Still, during the high season, travel sentiment is likely to improve in the final two months, when the load factor could climb to 70-80 percent, compared with 85 percent reported last year in the same period. 

All domestic flights to 24 destinations have been resumed by Nok Air, with the flight frequency recovering to 70% of the pre-pandemic numbers. 
The airline has had 22 aircraft in operation since mid-October. 
In the first half of this year, Nok Air reported 3.4 billion baht in revenue, down 47.96 percent from the same period a year ago. In the first half, a net loss of 3.75 billion baht was published, up from a loss of 1.18 billion baht in the same period a year earlier. 

On Wednesday, NOK shares closed at 0.56 baht, down one satang, in trade worth 163,820 baht, on the SET.

Source: Bangkok Post