Thailand’s Nok Air plans to pursue fleet and network expansion as it seeks to raise about USD100 million through an initial public offering (IPO). The planned 3Q2013 IPO is one of several milestones for Nok in 2013 as the low-cost carrier resumes international services, initially with flights to Yangon and Mawlamyine in Myanmar. Nok will also take delivery of additional 737-800s, completing in 2013 the phase-out of its 737-400 fleet, which it has been operating since launching services in 2004.
Nok, which is partially owned by Thai Airways, has traditionally been a relatively conservative and low profile carrier. It has not been shy to contract during challenging periods and has never been concerned about establishing an international profile, instead focusing on building a strong local brand in the Thai market. But Nok’s steady profitability and strong position in a growth market should allow for a successful IPO and could eventually lead to significant international expansion.
Mawlamyine represents interesting niche market for Nok
Nok instead sees a potential niche in Mawlamyine, which is Myanmar’s fourth largest city after Yangon, Mandalay and the new capital Naypyidaw. Mawlamyine is the capital of Mon Stat state, which is located southeast of Yangon and near the border with Thailand. Mae Sot is the closest city in Thailand and is only about 100km away by air. But to drive between Mae Sot and Mawlamyine takes several hours as the road is circuitous and rough.
As it is such a short flight, and as Nok is able to use the Saab 340 fleet operated by Siam General Aviation, the risk in entering the Mae Sot-Mawlamyine market is low. Nok already uses Saab 340s to serve Mae Sot from Bangkok and Chang Mai, the largest city in northern Thailand. As a result Nok can provide connections to Mawlamyine from both its two largest bases and simply extend an existing Nok Mini Mae Sot flight to include an additional very short sector to Mawlamyine.
The Mawlamyine airport is currently only served by domestic carriers. Technically only three of Myanmar’s airports are open to international services – Mandalay, Yangon and Naypyidaw, where an international airport opened in late 2011 but so far has seen only very limited domestic services due to a lack of demand. Nok has received special clearance from Myanmar authorities to operate the first international flights at Mawlamyine.
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