Amid rising demand for low-cost carrier travel in the Singapore and Thailand region, Nok Air and Scoot are planning to set up a new budget airline in Bangkok. The plan is now in the process stages and awaiting approval and finalization. If approved by regulatory agencies, there will be a new airline name named approved NokScoot (a combination of both airlines’ name). The plan, the new airline will operate on medium and long-haul routes.
How Much Is Investment Price?
To launch the join plan, both companies will make an investment of S$80m ($ 64m).The value is quite fantastic but it is based on the planning stage first. One of the main considerations is about the potential that will be obtained later. From year to year there is a significant increase in passengers in both regions.The value of the investment will be used for all operational and other needs for the progress of the new airline.
How About the Revenue Share?
Regarding the revenue sharing, Nok Air will own up to 51% of the venture. Why bigger? That’s because Nok is Thailand’s second-largest budget carrier that is also the base of NokScot flights later. Management will indeed be centered in Bangkok Thailand so the role of Nok will be greater than from Scoot. It will certainly affect the revenue sharing where Nok is bigger than scoot.
What the Aim of This Joint Investment?
The purpose of this joint investment is essentially overseas business expanding. But specifically it is to present low-cost carrier flights that will provide benefits for both countries. Patee Sarasin, Nok Air Chief Executive Officer said if the purpose of this joint investment is to attract tourists who will come to Thailand. In addition, it is also further expected to be the driving force of Thai economy.
Campbell Wilson, Scoot Chief Executive Officer added that Thailand is Asia’s premier tourist destination. In addition, Thailand is also a logical hub for Scoot to expand flight to another regions in Asia.As a major airline in Singapore, Scoot has a variety programs and agendas of future route development targets.
Joint investment program is indeed busy doing some airlines today. In addition to the two airlines, reportedly Tigerair Taiwan also make through a joint venture with China Airlines.