Despite recent denials, NokScoot is closing down
The Covid-19 pandemic has claimed another victim – regional budget airline NokScoot is closing down. The company’s board of directors decided yesterday to liquidate the airline, the decision to be announced in a general meeting of shareholders held in 2 weeks. The move will leave around 450 staff unemployed, except the few who will remain to work on the liquidation process. The company promises to pay full benefits in accordance with Thai law.
NokScoot is a joint venture between Singapore-based Scoot and SET-listed Nok Airlines. Nok, a domestic budget carrier established in 2004, holds 51% of the shares and Scoot, a subsidiary of Singapore Airlines, holds the remaining 49%. Thai Airways, now in bankruptcy, holds a 13.28% stake in Nok Airlines.
NokScoot operated medium and long haul Asian routes to 7 cities in China and 3 in Japan, as well as New Delhi, Singapore and Taipei, from its base at Bangkok’s Don Mueang airport. Even before the coronavirus outbreak, it was struggling due to intense competition from other low cost carriers. According to one board member:
“Unprecedented challenges arising from the Covid-19 pandemic have further exacerbated the situation Consequently, Scoot does not see a path to recovery and sustainable growth for NokScoot. In considering other possible alternatives, Scoot also offered to sell its 49 percent stake in NokScoot to Nok Air for a nominal sum of 1 Thai Baht. This was not taken up. We regrettably had to then make the joint decision to move ahead with the liquidation. Thailand remains an important market for the Singapore Airlines Group. Singapore Airlines, SilkAir and Scoot are committed to continuing to serve customers in Thailand with their existing operations.”
There was speculation the company would go out of business after it announced employee layoffs.
NokScoot will return 3 aircraft from it 5-jet fleet to the parent company in Singapore by the end of June.
SOURCES: Thai Enquirer | The Pattaya News | Chiang Mai One
