Nok Air and Scoot Agree to Set up New Airline

28th Dec 2013

The battle for supremacy under Thai skies will soon intensify as another player is looming in the horizon eager to get a piece of the action.

This after Nok Air and Singapore-based Scoot have agreed in principle to set up a new airline in the country to take on the challenge of the growing long-haul low-cost travel segment in the region.

The recent announcement made by both airlines will usher in the new era of the region's fast-growing travel market as the Asean Economic Integration will soon take effect in a couple of years. The ASEAN Economic Integration, among others, will remove country-specific restrictions for travelers holding passports from any of the ASEAN-member countries, and adopt a common policy to be observed by all 10 national governments.

Along with this event, airline companies across the ASEAN region are now trying to position themselves in the forefront of the action in order to take advantage of the forthcoming integration.

Over in Thailand, ahead of the historic event which is about to unfold, Thailand's Nok Air is having a sweet talk with Singapore's low-cost airline, Scoot. The primary agenda of their talks focus on the formation of a new airline that would rival Thai AirAsia X, a long-haul low-cost airline to be launched by Thai AirAsia and Malaysia's AirAsia X.

The planned long-haul low-cost version between Nok Air and Scoot will be christened, what else, NokScoot. Sounds, uhm, predictable? You bet!

According to sources, the joint venture will have Scoot take up the 49% maximum stake allowed by Thai government and the remaining majority stake, 51%, will be taken up by Nok Air. Both airlines will each contribute an undisclosed amount for a total initial capital of S$80 million.

Both airline officials were so excited about their plans to expand their market beyond their respective network.

Both Thailand and Singapore are major tourist destinations in the region with Thailand joining the ranks of the world's top ten most visited countries.

Earlier, Thai AirAsia and Malaysia-based AirAsia X made another joint venture to set up yet another airline, further crowding the region's already crowded market. This time, however, a long-haul version of the budget carrier, Thai AirAsia X, will take shape to tap the growing market of this particular segment.

Not to be outdone is Thai's Nok Air and Scoot who take the challenge seriously with the recent announcement to set up NokScoot.

The initial plan was to start flying out of Bangkok to regional destinations across East Asia with possible flights to China, Japan and South Korea, the three biggest markets.

It will initially keep a fleet of two to three Boeing 777-200 twin-engine jets for the inaugural operations.

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