NOK Issues Plan and Progress Report on ‘C’ Sign
NOK Issues Plan and Progress Report on ‘C’ Sign 
NOK Issues Plan and Progress Report on ‘C’ Sign
2 ธ.ค. 2563

Nok Airline Public Company Limited (NOK) announced a plan and progress report on ‘C’ sign, which due to the financial statements for Q3/2020 for the period ending 30 September 2020 has the proportion of shareholders’ equity less than 50% of paid-up capital. The essence can be summarized as follow:
 
The causes
1) The ongoing outbreak of Covid-19 which poses severe impacts on global demand for air transportation. The industry has been impacted from the international travel restrictions and local shutdown from March to May 2020 resulting in temporary suspensions of international flight operations. Nevertheless, the Company was the only carrier that continues to operate domestic services during the shutdown as the Company considers air transport to be vital to the community even if it results in financial loss.
 
2) The implementation of a new accounting standard on leasing contracts which came into effect on 1 January 2020 resulting in losses from revenue recognition on foreign exchange as the company holds long-term contracts in foreign currencies.
 
3) The liquidation of NokScoot Company Limited (Subsidiary) on 29 July 2020 resulting in loss incurred from subsidiary’s liquidation.
 
4) Despite an increase in domestic air passengers carried in Q3/2020, there had been an increase in price competition as well as all Thai air carriers were only allowed to operate domestic flights resulting in the decrease in fare and cabin factor.
 
5) Prevailing fixed costs including aircraft leasing and maintenance with reduced incomes causing adverse impact on the company’s liquidity situation.
 
Measures to Resolve the C Sign Listing
1) Shift marketing positioning, increase cooperation with various business partners not limited to airline partners and increase ancillary revenue other than air fare revenue and cargo transportation.
 
2) Debt restructuring by negotiating with creditors to improve the cash flow situation. This is being carried out by negotiating for debt and interest payment suspension, extensions to bill settlement period, reduction in debt and interest (fully or partially), and leasing fee renegotiation to reflect the current state of the aviation industry.
 
3) Revision of long and short term marketing plan. This means the emphasis on optimizing route network and fleet strategy to reflect the restriction on international travel for the short-term basis.
For the long-term, the company plans for international expansion as international air travel becomes viable. Furthermore, the Company aims to increase distribution channels to cover various platforms and forging an ever closer relationship with travel agencies both in and out of Thailand.
 
4) Increasing the fleet efficiency by adding more night time operations, fleet adjustment, improvement in managing maintenance scheduling and thus reducing cost.
 
5) Organisational restructuring. The Company will streamline its business process for improved efficiency along with the optimization of the workforce and enhance employee’s skills and expertise along with the head office relocation to Don Mueang Airport to reduce cost and operational efficiency.
 