Nok Air buys SGA, unites Nok Mini

Budget airline Nok Air is buying out Siam General Aviation Co (SGA), the Thai commuter airline whose founder decided to call it quits.

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Nok Air’s board is expected to approve the purchase of SGA for around 150 million baht on Wednesday, say industry sources.

The expected approval follows due diligence conducted after SGA founder Jain Charnnarong and other minority shareholders resolved to disengage from the feeder and charter air business established in 2000.

Mr Jain’s health and his family’s advice were cited as the main reasons for the sale. Over the past several years, Nok allowed SGA to operate under its umbrella.

SGA adopted the brand “Nok Mini” as a non-equity-associated carrier to Nok Air, piggybacking on Nok Air’s brand value, network and booking coordination.

After the buyout is completed, Nok Mini will become a wholly-owned subsidiary of Nok Air, so its performance can be isolated and measured by the parent company.

Nok Mini’s existing operation is likely to stay intact, with its fleet largely comprising six Saab 340B turboprops, each with 34 seats.

Nok Air executives see the purchase of SGA as supporting its strategy to grow its short-haul light traffic routes served by small airports incapable of handling larger jets such as Boeing 737-800s, which constitute the bulk of Nok Air’s fleet.

Ten provincial airports in Thailand cannot handle jets the size of a B737-800 or Airbus 320 because of their short and small runways. From Bangkok’s Don Mueang airport, Nok Mini serves seven Thai cities comprising Nan, Loei, Mae Sot, Phrae, Buri Ram, Chumphon and Ranong.

Nok Mini operates frequent flights on 12 routes, with two of them international.

From Chiang Mai, it offers regular flights to Mae Sot, Mae Hong Son and Udon Thani. Through Mae Sot, it connects to Mawlamyine and Yangon, both in Myanmar.

Last November, Nok Air placed a firm order with Canada’s Bombardier Aerospace for two Q400 NextGen turboprop airliners, along with options for two more aircraft and purchase rights on four others. The aircraft will help it expand into smaller Thai and regional cities, said Nok Air chief executive Patee Sarasin.

The first regional aircraft will be delivered in July.

On Feb 12, Nok Air committed to order 15 B737 jets from the US planemaker Boeing in a deal valued at US$1.45 billion.

Nok Air mostly focuses on domestic routes, only operating international services to neighbouring Myanmar, but it intends to add more short-haul international routes and expand into the mid- to long-haul sector in the second half of this year through a novel 51:49 joint venture carrier with Singapore Airlines’ long-haul low-cost carrier Scoot, known as NokScoot.

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