Three Thai airlines devising fundraising plans to exit rehabilitation

Nok Air, Thai AirAsia X and Thai Airways International (THAI) have come up with fundraising plans to exit rehabilitation now that business performance has greatly improved thanks to the tourism recovery following the Covid-19 pandemic.

Wutthiphum Jurangkool, Nok Air CEO, told Nation Group media arm Thansettakij on Monday that he has every confidence that the airline will exit the rehabilitation plan within two years or in 2026.

He said the rehabilitation was progressing smoothly, citing negotiations on aircraft rental contracts, increasing aircraft utilisation rate and generating revenue from new services like an airport lounge and air cargo.

“These efforts resulted in Nok Air seeing a profit for the first time in nine years,” he said. He added that the airline has been granted a loan of no more than 2 billion baht for boosting its liquidity on aircraft maintenance.

Wutthiphum said the airline aims to open new international flight routes in the fourth quarter this year, and increase aircraft utilisation rate from 12 hours a day to 13 hours a day by the end of this year.

“Nok Air will schedule flights to Mumbai and Hyderabad on October 27, he said, adding that this move came after the airline received the right to operate 2,000 flights per week between Thailand and India.

He said the airline will open flights from Don Mueang Airport to Nanjing on July 9, followed by Don Mueang-Krabi on August 2. The airline is requesting permission to allow passengers to travel with their pets on every flight, he added.

Wutthiphum said Nok Air has discussed flight connections with THAI at Suvarnabhumi Airport and expects this to begin later this year. This will enable foreign passengers to access other airports in Thailand along with solving THAI’s insufficient aircraft issue, he said.

“Nok Air will repay 2.7 billion debt to major shareholders and conduct fundraising of 3 billion baht by 2026,” he said. He added that the airline is considering whether fundraising will be for budget allocation, debt-to-equity or launching a debenture.

Fundraising to exit rehabilitation plan

Tassapon Bijleveld, Thai AirAsia X CEO, said the airline aims to conduct fundraising of 1 billion baht in a bid to exit its rehabilitation plan this year. The airline is considering whether the fundraising will take the form of a stock offering to existing shareholders or new investors, he said.

He said the airline has planned to add another four aircraft to the fleet this year, making a total of 11 aircraft. This move aims to increase the number of flights and expand flight routes, he added.

“Thai AirAsia X has prepared to reopen direct flights from Bangkok (Suvarnabhumi Airport) to Japan’s Nagoya from August 1 onwards,” he said.

He said the airline will operate four Bangkok-Nagoya flights a week and is expecting to increase revenue from Japan flights by 15 per cent from the current 50 per cent plus.

Thai AirAsia X is also studying the possibility of introducing new flights to Sendai in Japan, Melbourne in Australia and destinations in Europe and expects to reach a conclusion soon, he added.

Finance Ministry to offer 12 billion baht to THAI

State Enterprise Policy Office director-general Tibordee Wattanakul, said THAI is planning on fundraising to exit the rehabilitation plan and enable the airline to be relisted on the Stock Exchange of Thailand.

“The office has to propose the plan for the policy level’s consideration. This should be done late this year,” he said.

He said the Finance Ministry aims to increase shareholding in THAI to 40% by offering 12 billion baht to the airline. This will not make THAI a state enterprise, he added.

Meanwhile, THAI’s director of corporate finance Rat Raksamruaj said the airline would conduct fundraising in the fourth quarter this year, in which new stocks would be offered to existing shareholders and interested employees.

However, he said the airline needs to change 80 billion baht of debt into equity by December 31 this year, so it can exit the rehabilitation plan and relist on the Thai stock market in 2025.