Nok Air shareholders approve Bt3bn loan

[webfact]

Nok Air shareholders approve Bt3bn loan

By The Nation

 

 

Nok Air says it will go ahead with its business turnaround plan which includes fleet improvement and route expansion, to enhance the airline’s competitiveness amid fierce competition. Nok Air said it would reduce expenses and raise revenue, among planned action to achieve a turnaround.
 

Pravej Ongartsittigul, acting chief executive officer of Nok Air PLC, revealed to the shareholders at the annual general meeting on April 25 endorsed the airline’s borrowing up to Bt3 billion from a connected party. The loan will serve as reserve working capital, to finance the operations in general. 

 

“The loan will increase our working capital to the level sufficient to help us complete the business turnaround mission. The loan condition is more relaxed than that of financial institutions. This loan, one of alternative sources of fund, will reduce shareholders’ burden as we will no longer need to raise capital,” Pravej said. 

 

Nok Air said it was pushing forward its turnaround plan to stop losses. In 2018, losses persisted due to intensifying competition in the airline industry coupled with fluctuating jet fuel prices. Like other airlines, Nok Air showed losses in the year as the company’s cost management was hit by several risk factors. 

 

Pravej said Nok Air’s routing plans would be arranged to primarily satisfy market demand. Meanwhile, the company strives to improve the profitability of each route and aircraft use, particularly that of international flights which generate higher ticket sale revenue and profits above domestic flights, the CEO said.

 

Source: http://www.nationmultimedia.com/detail/breakingnews/30368384

 

-- © Copyright The Nation 2019-04-26

[Cadbury]

1 hour ago, webfact said:

.....the annual general meeting on April 25 endorsed the airline’s borrowing up to Bt3 billion from a connected party

The "connected party" wouldn't be Thai Airways by any chance.

Thai Airways is Nok Air's largest shareholder and holds the dismal distinction of being the biggest loss maker of all international airlines. 

If this is the case then it is like a daisy chain where Thai Airways props up Nok Air and the government (aka taxpayer) props up Thai Airways. 

http://smartaviation-apac.com/2019/01/thai-airways-considers-funding-ailing-nok-air/

[Srikcir]

September 2017:

• Nok Air plans to raise Bt1.7-bn to stay afloat with Thai Airways International increasing its stake by Bt350 million for aircraft maintenance and rent in an effort to return to making money. 
• Nok Air prepared a three-year rehabilitation plan starting from 2017. http://www.nationmultimedia.com/detail/business/30327259

August 2018:

• Nok Air losses widened to Bt830 million in the quarter versus losses of Bt 650 million a year ago.
• Nok Air saw revenue dropping 1 percent. https://www.thaivisa.com/forum/topic/1052285-thai-budget-carriers-losses-mount-shares-tumble/?utm_source=newsletter-20180811-0716&utm_medium=email&utm_campaign=news

And now

17 hours ago, webfact said:

Nok Air shareholders approve Bt3bn loan

“The loan will increase our working capital to the level sufficient to help us complete the business turnaround mission.

Two years into its planned three year rehabilitation plan!

What's next, a five-year revival plan?

Classic "throwing good money" after "bad money."

If this airlines wants to "reduce shareholders’ burden" it can start by closing its business.

But then the same goes for its parent company state-owned Thai Airways.