The board of Thai Airways International (THAI) has agreed to buy an extra 10% stake in its low-cost subsidiary, Nok Air. The deal, which involves the purchase of five million shares from Krung Thai Bank, is worth THB165 million (US$5.3 million), and will increase THAI’s stake in Nok Air to 49%.
THAI will now have five directors on the Nok Air board, compared to four previously, with the national carrier’s President, Piyasvasti Amranand becoming one of the LCC’s directors.
The new deal indicates that Nok Air is still firmly part of THAI’s broader low-cost strategy. The national carrier is in the process of creating a new regional budget airline, Thai Smile, which is expected to launch in July 2012. Thai Smile will initially serve domestic routes out of Bangkok, putting it in direct competition with Nok Air.