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Enclosure 2
Nok Airlines Public Company Limited
Notice of the Allocation of Newly Issued Ordinary Shares
with Warrants to Purchase Ordinary Shares No.1 (NOK-W1)
to Existing Shareholders of the Company (Rights Offering)
Subscription Period 16-19 and22 May2017
Nok Airlines Public Company Limited
Part 1- Information on the Allocation of Newly Issued Ordinary Shares
1. Name and Address of the Company
Name : Nok Airlines Public Company Limited
Location : 183 Rajanakarn Building,17th Floor, South Sathorn Road, Yannawa, Sathorn,
Bangkok 10120
Website : https://www.nokair.com
2. 'DWHDQG1XPEHURIWKH%RDUGRI'LUHFWRUVu0HHWLQJDQGWKH6KDUHKROGHUVu0HHWLQJWKDW$SSURYHG
the Allocation of Newly Issued Ordinary Shares
7KH%RDUGRI'LUHFWRUVu0HHWLQJ : No. 2/2017 on 28 February 2017
The Annual General 6KDUHKROGHUVu0HHWLQJ : 19 April 2017
3. Details of the Allocation of Newly Issued Ordinary Shares
The 2017 Annual General 6KDUHKROGHUVu 0HHWLQJ RI 1RN $LUOLQHV 3XEOLF &RPSDQ\ /LPLWHG vthe
Companyw KHOG RQ $SULO DW $0 in the Grand Ballroom, 4th Floor, Miracle Grand
Convention Hotel, resolved to approve the allocation of WKH&RPSDQ\uVnewly issued ordinary shares of
not exceeding 781,250,000 shares with a par value of Baht 1 per share. The newly issued ordinary
shares of not exceeding 625,000,000 shares shall be offered to the existing shareholders respective to
their shareholdings (vRights Offeringw) at the ratio of 1 existing ordinary share to 1 newly issued
ordinary share at the offering price of Baht 2.40 per share, and the newly issued ordinary shares of not
exceeding 156,250,000 shares shall be reserved for the exercise of Warrants to Purchase Ordinary
Shares of the Company No.1 (NOK-W1) vWarrantsw which will be issued and offered at no charge to
the existing shareholders who have been allotted the newly issued ordinary shares, at the ratio of 4
newly issued ordinary shares to 1 unit of warrant, with each warrant entitling a right to purchase 1
ordinary share at the price of Baht 5.00 per share.
In this regard, the existing shareholders who are entitled to receive the Rights Offering shares with
Warrants shall be the shareholders whose names appear in the share register book on 27 April 2017
(Record Date). The Company shall close the share register book on 28 April 2017 to collect the name
of the shareholders pursuant to Section 225 of the Securities and Exchange Act B.E. 2535 (including
its amendments). The subscription period for the newly issued ordinary shares shall be between 16-19
May 2017, and 22 May 2017 totaling 5 business days.
Details of the issuance and offering are as follows:
Page2
Nok Airlines Public Company Limited
3.1Newly Issued Ordinary Shares
Type of shares : Ordinary shares
Current registered capital : Baht 625,000,000 divided into625,000,000 ordinary
shares with the par value of Baht 1 per share
Registered capital after capital : Baht 1,406,250,000 divided into 1,406,250,000 ordinary
increase in case existing shares with the par value of Baht 1 per share
shareholders subscribe for all newly
issued ordinary shares and fully
exercise warrants)
Current paid-up capital : Baht 625,000,000 divided into625,000,000 ordinary
shares with the par value of Baht 1 per share
Amount of capital increase (in case : Baht 625,000,000 divided into625,000,000 ordinary
existing shareholders subscribe for all shares with the par value of Baht 1 per share
newly issued ordinary shares)
Paid-up capital after capital increase : Baht 1,250,000,000 divided into1,250,000,000 ordinary
(in case existing shareholders shares with a par value of Baht 1 per share
subscribe for all newly issued ordinary
shares)
Number of shares allotted : Not exceeding625,000,000 shares
Offering price : Baht 2.40per share
Allocation ratio : 1 existing ordinary shareto 1 newly issued ordinary share
The existing shareholders are entitled to subscribe for the
newly issued ordinary shares in excess of their
entitlements only if there remains unsubscribed share
from the allocation to all existing shareholders respective
to their shareholdings. The unsubscribed shares shall be
allocated to oversubscribing shareholders in proportion to
their respective shareholdings and reallocated until there
is insufficient share for allocation.
Allocation Method : The Company shall allocate not exceeding 625,000,000
shares with the par value of Baht 1 per share to the
existing shareholders in proportion to their respective
shareholdings (Rights Offering) at the ratio of 1 existing
ordinary share to 1 newly issued ordinary share at the
offering price of Baht 2.40 per share.
Page3
Nok Airlines Public Company Limited
32Warrants to Purchase Ordinary Shares
Name : Warrants to Purchase Ordinary Shares of Nok Airlines
Company Limited No.1 (vNOK-W1wRUvWarrantsw offered
to the existing shareholders who subscribe for the newly
issued ordinary shares
Type of warrant : Named and transferable warrant
Number of warrants issued : Not exceeding 156,250,000 units
Shares reserved for the exercise of : Not exceeding 156,250,000 shares which represent 12.5
warrants percent of total paid-up capital of the Company
Offering method : The Warrants will be offered together with the newly issued
ordinary shares to the existing shareholders of the
Company proportionate to their shareholdings (Rights
Offering), whereby the Warrants will be offered to the
existing shareholders who subscribe for and are allotted
the newly issued ordinary shares at the ratio of 4 newly
issued ordinary shares to 1 unit of warrant. A fraction of
unit, if any, shall be disregarded. If there remains the
Warrants after the allotment, the Company will cancel the
remaining Warrants after the offering.
The Board of Directors determined the offering period of
the newly issued ordinary shares to the existing
shareholders respective to their shareholdings (Rights
Offering) on 16- 19 May 2017 and 22 May 2017 (totaling 5
business days), and the date to determine the name of
shareholders who entitle to subscribe for the newly issued
ordinary shares (Record Date) on 27 April 2017, and the
date to collect the name of shareholders according to
Section 225 of the Securities and Exchange Act B.E.2535
(as amended) by way of book closing on 28 April 2017.
Offering price : Baht0.00 per unit (no cost)
Issue date : 31 May 2017
Terms of Warrants : 3 years from the issue date. The Company shall not extend
the term of the Warrants after issuance.
Exercise ratio : unit of warrant shall be entitled to purchase 1 ordinary
share, subject to right adjustment as described under the
terms and conditions.
Page4
Nok Airlines Public Company Limited
Exercise price : Baht 5.00 per share, subject to right adjustment as
described under the terms and conditions.
Exercise date : Warrant holders may exercise their rights according to the
terms and conditions on every last business day of each
quarter within 3 years from the issue date of the Warrants
(the last business day of March, June, September, and
December). The first exercise date shall be on 30
September 2017 and the last exercise date shall be on 29
May 2020. Any exercise date that is not a business day
shall be postponed to the next business day.
Notification period for : Warrant holders who wish to exercise their rights to
the exercise of Warrants SXUFKDVHWKH&RPSDQ\uVRUGLQDU\VKDUHVVKDOO notify their
intention to the issuer during 9:00 A.M. y 4:00 P.M. within 7
business days prior to each exercise date. Any exercise
date that is not a business day shall be postponed to the
next business day. For the last exercise date, Warrant
holders shall submit notification to the issuer 15 days in
advance of the last exercise date.
Expiration date : 29 May 2020
Secondary market of the Warrants : The Company will list the Warrant on the SET.
Secondary market of new ordinary : The Company will list new ordinary shares issued from the
share issued upon the exercise of exercise of Warrants on the SET.
Warrants
Right adjustment of the Warrants : To protect the benefits of the Warrant holders, exercise
price and exercise ratio shall be adjusted upon the
occurrence of one or more of the following events:
(1) When there is a change in par value as a result of
any reverse stock split or stock split;
(2) When there is issuance of new shares at a discount
to the market price;
(3) When the Company offers convertible debentures or
new warrants at a discount to the market price;
(4) When the Company fully or partially pays dividend by
issuing new shares to the shareholders;
(5) When the Company pays dividend greater than the
rate specified in the terms and conditions;
Page5
Nok Airlines Public Company Limited
(6) Any other events that are similar to the events
described in number (1) to (5) above that prejudice
the interests of the Warrant holders upon the
exercise of Warrants.
In this regards, the Board of Directors, authorized directors
RI WKH &RPSDQ\ DFFRUGLQJ WR WKH &RPSDQ\uV $IILGDYLW RU
any person entrusted by the Board of Directors or
authorized directors of the Company according to the
&RPSDQ\uV$IILGDYLWVKDOOEHDXWKRULzed to determine other
conditions and details in relation to the adjustment or
change of the exercise ratio and exercise price.
Other conditions : The Board of Directors, authorized directors of the
&RPSDQ\ DFFRUGLQJ WR WKH &RPSDQ\uV $IILGDYLW RU DQ\
person entrusted by the Board of Directors or authorized
GLUHFWRUV RI WKH &RPSDQ\ DFFRUGLQJ WR WKH &RPSDQ\uV
Affidavit shall be authorized to do the followings:
1) to determine or amend the details, procedures and
other conditions related to the issuance and offering of
Warrants, as deemed appropriate, including but not
limited to, the terms and conditions of Warrants, issue
date, determination of the date on which the
shareholders will be allotted the Warrants, the number
of underlying shares to accommodate the exercise of
Warrants, exercise period, or events requiring the
Company to issue additional underlying shares to
accommodate the exercise of Warrants; and
2) to enter into negotiations, agreements, execution and
amendment to agreements, documents, sale report,
information disclosure, requests for waiver, reports,
applications for approval and necessary evidence
required in relation to the issuance and offering of
Warrants, as well as to communicate and submit the
aforementioned documents for approval, together with
the relevant documents and evidence to, and make
any arrangement, or contact and/or perform any acts
with, the Office of the Securities and Exchange
Commission, the Stock Exchange of Thailand,
government agencies and/or any other relevant
Page6
Nok Airlines Public Company Limited
authorities concerning the issuance and offering of
Warrants, the listing of Warrants and the listing of the
newly issued ordinary shares from the exercise of
Warrants on the Stock Exchange of Thailand, and to
have authority to take any other actions which are
deemed necessary and appropriate for all of the
aforementioned matters.
Warrant registrar : Thailand Securities Depository Co., Ltd.
4. Allocation of the Newly Issued Ordinary Shares
4.1 In the case that shareholders subscribe for the newly issued ordinary shares pursuant to or less
than their entitlement, shareholders shall be fully allotted all newly issued ordinary shares for
which they have subscribed.
4.2 In the case that shareholders subscribe for the newly issued ordinary shares in excess of their
entitlement, shareholders shall express their intention to oversubscribe for the newly issued
shares in the subscription form at the same time as the subscription for the newly issued ordinary
shares pursuant to their entitlement.
In the case that there remain newly issued ordinary shares after the allocation pursuant to the
rights, the oversubscribing shareholders will receive the allocation of oversubscribed shares, as
follows:
a) In the case that the number of remaining newly issued ordinary shares exceeds the demand
of all oversubscribing shareholders; those oversubscribing shareholders will receive the
allocation of oversubscribed shares pursuant to their respective demands.
b) In the case that the number of remaining newly issued ordinary shares is less than the
demand of all oversubscribing shareholders, those oversubscribing shareholders will receive
the allocation of oversubscribed shares in proportion to their respective shareholdings,
pursuant to the following formula;
Number of oversubscribed shares to be allocated =
Number of remaining newly issued ordinary shares after the allocation pursuant to the rights x
Percentage of shareholding of each oversubscribing shareholder
Example
The newly issued shares equals to 2,000 shares. After deducting 1,400 shares subscribed
pursuant to the rights, 600 shares remains after the allocation pursuant to the rights which
shall be allotted to the oversubscribing shareholders as follows:
Page7Nok Airlines Public Company Limited
Percentage of Number of Number of shares
Number of
shareholding shares allotted subscribed shares
Shareholders oversubscribed
(%) pursuant to the Pursuant to In excess of
shares to be allocated
right shares the rights the rights
Shareholder A 20 400 400 300 600 x 20% = 120
Shareholder B 35 700 100 - -
Shareholder C 35 700 700 400 600 x 35% = 210
Shareholder D 10 200 200 50 600 x 10% = 60*
Total 100 2,000 1,400 750 390
Number of newly issued ordinary shares to be allocated after disregarding the fraction:
Number of newly issued ordinary shares to be Total shares
allocated (shares) allocated
Shareholders
In excess of the right
Pursuant to the right
(First round)
Shareholder A 400 120 520
Shareholder B 100 - 100
Shareholder C 700 210 910
Shareholder D 200 50* 250
Total 1,400 380 1,780
* Number of allotted shares shall not exceed the number of shares subscribed by each shareholder
c) The number of newly issued ordinary shares to which each oversubscribing shareholder is
entitled to be allocated shall not exceed the number of shares subscribed and fully paid for by
such shareholder.
d) In the case that there are newly issued ordinary shares remaining after the allocation
pursuant to (b) above, the remaining shares shall be reallocated to each of the
oversubscribing shareholders pursuant to (b)
e) The Company shall reallocate newly issued ordinary shares to the oversubscribing
shareholders according to the procedure prescribed in (b) until the number of newly issued
ordinary shares is inadequately allocable to the existing shareholders in proportion to their
shareholdings. In the case that there are newly issued ordinary shares remaining from the
allocation in the final round, the Company will decrease its registered capital by cancelling the
newly issued ordinary shares remaining from the Rights Offering.
5. 7KH5HFRUG'DWHWR'HWHUPLQHWKH/LVWRIWKH&RPSDQ\uV6KDUHKROGHUV(QWLWOHGWR6XEVFULEHfor
the Newly Issued Ordinary Shares with Warrant
27 April 2017
6. Closure Date of Share Register Book to Compile the List of Shareholders Pursuant to Section 225
of the Securities and Exchange Act B.E. 2535 (as amended)
28 April 2017
Page8Nok Airlines Public Company Limited
7. Subscription Period and Payment Method
7.1 Subscription Period
During 16-19 May 2017 and 22 May 2017, from 9.00 A.M. y 3.30 P.M. (only on the business day
RIWKH6WRFN([FKDQJHRI7KDLODQG vSETw
7.2 Place for Subscription and Payment
$VLD3OXV6HFXULWLHV&RPSDQ\/LPLWHG vSubscription Agentw
9th Floor, Sathorn City Tower
175 South Sathorn Road, Thung Maha Mek, Sathorn, Bangkok 10120
Tel. 0-2680-1327 0-2680-1715 Fax: 0-2680-1733
** The Company by Subscription Agent shall not accept subscription by fax or mail**
8. Method of Subscription and Payment
The shareholders who wish to subscribe for the newly issued ordinary shareswith Warrants must
clearly and correctly complete and sign the Subscription Form for Newly Issued Ordinary Shareswith
Warrants by specifying the number of shares to subscribe pursuant to their rights as determined in
Certificate of Subscription Entitlement, issued by the Thailand Securities Depository Company Limited
(Enclosure No. 1), and the number of shares to oversubscribe in the same Subscription Form. The
subscribers shall make full payment by cash transfer, personal cheque, cashier cheque or bank draft
for their subscription according to the number of shares subscribed and oversubscribed (if any), and
submit the subscription documents at the Place for Subscription and Payment during the Subscription
Period (as specified in 7).
8.1 Payment Methods
(1) Payment by Cash Transfer (Full Payment)
` 7UDQVIHU RU GHSRVLW PRQH\ LQWR WKH 6XEVFULSWLRQ $JHQWuV DFFRXQW QDPH v$VLD 3OXV
6HFXULWLHV&RPSDQ\/LPLWHG)RU6HFXULWLHV6XEVFULSWLRQwDVGHWDLOHGEHORZ
Bank/ Branch : Bangkok Bank / Sathorn
Account Type : Current Account
Account Number : 142-310059-1
` Subscribers are required to submit the original transfer evidence together with the
Subscription Form for Newly Issued Ordinary Shareswith Warrants.
` SSHFLI\VKDUHKROGHUVuUHJLVWUDWLRQQXPEHU(as indicated in the Certificate of Subscription
Entitlement, issued by the Thailand Securities Depository Company Limited), full name,
and contact number on the back of transfer evidence.
` Subscription period by cash transfer or cash deposit is during16-19May2017 and22
May 2017(only on the business day of the SET) from 9.00 A.M. y 3.30 P.M
Page9Nok Airlines Public Company Limited
(2) Payment by Personal Cheque, Cashier Cheque, or Bank Draft (Full Payment)
` Shareholders who prefer to make payment by their personal cheque, cashier cheque, or
bank draft, please contact the Subscription Agent at the Place for Subscription and
Payment. 7KH SHUVRQDO FKHTXH FDVKLHU FKHTXH RU EDQN GUDIW VKDOO EH FURVVHG v$&
3D\HH 2QO\w, payable WR v$VLD 3OXV 6HFXULWLHV &RPSDQ\ /LPLWHG )RU 6HFXULWLHV
6XEVFULSWLRQwDQGPXVWEHGDWHGQRODWHUWKDQ17 May 2017 and must be able to collect
money by the clearing house located in Bangkok within the next business day.
` SSHFLI\VKDUHKROGHUVuUHJLVWUDWLRQQXmber (as indicated in the Certificate of Subscription
Entitlement, issued by the Thailand Securities Depository Company Limited), full name,
and contact number on the back of personal cheque, cashier cheque, or bank draft.
` Subscription period by personal cheque, cashier cheque, or bank draft is during16-17
May 2017(only on the business day of the SET) from 9.00 A.M. y 3.30 P.M.
The shareholders shall be responsible for any related expenses and bank fees (if any)
Other Information for Subscription
` The shareholders who have not exercised their rights to subscribe for newly issued
ordinary shares with Warrants or failed to make subscription payment in full, or personal
cheque or cashier cheque or bank draft cannot be collected on the date written on the
cheque, such shareholders shall be considered to waive their rights to subscribe for the
newly issued ordinary shares with Warrants.
` In the case that payment for subscription is made by personal cheque, cashier cheque,
or bank draft, the payment of such subscription will deem to be complete only when the
bank has cleared the amount specified and when the Company has collected the
payment for subscription.
` The Company by Subscription Agent does not accept subscription payment in cash.
` The Company by Subscription Agent does not accept personal cheque, cashier cheque,
or bank draft dated before the subscription period.
` The Company hereby reserves the right to change the details of subscription and
payment for the subscription or other conditions as deemed appropriate.
8.2 Required Documents for Subscription
Shareholders and their proxies will be required to submit the documents for subscription of newly
issued ordinary shares, together with the payment for subscription pursuant to their rights and
oversubscription, to Subscription Agent (as specified in 7.2), as follows:
a) Subscription Form for Newly Issued Ordinary Shares with Warrants to Purchase Ordinary
Shares No.1 (NOK-W1) of Nok Airlines Public Company Limited (Enclosure No. 4) which is
correctly, completely and clearly filled.
Page10Nok Airlines Public Company Limited
Subscriber must specify the number of shares for which each subscriber wishes to subscribe
according to his/her right as indicated in the Certificate of Subscription Entitlement, issued by
the Thailand Securities Depository Company Limited, and must clearly specify the number of
shares for which each subscriber wish to subscribe in excess of his/her right. In the case
that the subscriber is a juristic person, the Subscription Form must be signed by the
authorized person(s) of such juristic person and affixed with a company seal (if any).
Shareholder must only submit one Subscription Form for newly issued ordinary shares with
Warrants per one Certificate of Subscription Entitlement, issued by the Thailand Securities
Depository Company Limited.
In case of oversubscription, subscriber is required to subscribe in full of his/her entitlement
prior to subscription for the excess shares.
b) Certificate of Subscription Entitlement, issued by the Thailand Securities Depository
Company Limited (Enclosure No. 1)
,VVXHGE\7KDLODQG6HFXULWLHV'HSRVLWRU\&RPSDQ\/LPLWHG vTSDw WKH&RPSDQ\uVUHJLVWUDU
and sent by registered mail to the shareholders together with this notification, which
indicates number of newly issued ordinary share allocated to the shareholder pursuant to
his/her right.
c) Evidence of Payment
Subscriber is required to submit evidence of full payment for subscription of the newly issued
ordinary shares for those pursuant to his/her rights and oversubscription by attaching all
related documents as specified in 8.1.
d) Documents for oversubscription
A certified true copy of the front page of saving account book or a statement of current
account or saving account showing the 10-digit account number, in case that the subscriber
wishes to receive the refund for all or any unallocated portion of the share subscription in
excess of his/her entitlement. The refund shall be credited into his/her bank account via
money transfer system.
The name which appears in such bank account shall be the same as that of the
oversubscribing shareholder and account shall be either saving account or current
account of the following banks;
1) Bangkok Bank Public Company Limited
2) Krung Thai Bank Public Company Limited
3) Bank of Ayudhya Public Company Limited
4) KasikornBank Public Company Limited
5) CIMB Thai Bank Public Company Limited
6) TMB Bank Public Company Limited
Page11Nok Airlines Public Company Limited
7) Siam Commercial Bank Public Company Limited
8) Thanachart Bank Public Company Limited
9) United Oversea Bank (Thai) Public Company Limited
The Company by Subscription Agent shall refund the subscription payment via money
WUDQVIHUWRVXEVFULEHUuVEDQNDFFRXQWZLWKLQEXVLQHVVGD\Vafter closing of the subscription
period. In the case that the subscriber does not have bank account with these banks, the
Company by Subscription Agent shall refund the subscription payment by issuing a crossed
FKHTXHSD\DEOHWRWKHVXEVFULEHUDVQDPHDSSHDUHGLQWKH&RPSDQ\uVVKDUHUHJLVWHUERRN
on the book closure date on 28 April 2017, and delivering such cheque via registered postal
mail to the address appeared in the share register book on 28 April 2017 within 10 business
days after closing of the subscription period.
e) Additional documents in case of appointment of proxy
A Power of Attorney affixed with a stamp duty of Baht 30, together with certified true copies
of identification cards of the subscriber and the attorney-in-fact (Enclosure No. 5)
f) Additional documents in case of share depository in the Issuer Account
For the subscriber who wishes to deposit newly issued ordinary shares into the Issuer
Account No. 600 in the name of the subscriber, please fill in the required information in the
IRUP v$GGLWLRQDO 6XEVFULSWLRQ 'RFXPHQWV 2QO\ IRU WKH 6XEVFULEHU :LVKLQJ WR 'HSRVLW WKH
6HFXULWLHVLQWRWKH,VVXHU$FFRXQWw $GGLWLRQDO(QFORVXUH2.1) for further submission to the
TSD.
g) Documents for Identification
Thai Individual
A certified true copy of valid identification card or, in the case there is no identification card,
a certified true copy of house registration containing the 13-digit identification number or a
certified true copy of any other official documents containing the 13-digit identification
number may be submitted. In the case that the subscriber is a minor (aged less than 20
years), a consent letter from his/her guardian (Father and/or Mother), certified true copy of
the identification card of his/her guardian (Father and/or Mother), and a certified true copy of
WKHPLQRUuVKRXVHUHJLVWUDWLRQDUHUHTXLUHG7KHVLJQDWXUHRQLGHQWLILFDWLRQGRFXPHQWPXVW
be the same as the signature on the Subscription Form for Newly Issued Ordinary Shares
with Warrants.
In case of WKHFKDQJHRIILUVWODVWQDPHZKLFKFDXVHVWKHVXEVFULEHUuVILUVWODVWQDPHWREH
differed from his/her name appeared on the share register book as of 28 April 2017 or in the
Certificate of Subscription Entitlement, issued by the Thailand Securities Depository
Company Limited, a certified true copy of official documents issued by a government entity,
such as marriage certificate, divorce certificate, or certificate of change of first name/last
name, must also be attached.
Page12Nok Airlines Public Company Limited
Foreign Individual
A certified true copy of alien identification card or valid passport is required. The signature
on every identification document must be the same as the signature on the Subscription
Form for Newly Issued Ordinary Shares with Warrants.
Juristic Person Incorporated in Thailand
$ FRS\ RI WKH FRPSDQ\uV DIILGDYLW LVVXHG E\ WKH 0LQLVWU\ RI &RPPHUFH QR PRUH WKDQ
months prior to the subscription date, certified a true copy by the authorized person(s) and
affixed with the seal of such juristic person (if any), together with a certified true copy of
identification card, alien certificate or passport (as the case may be) of such authorized
person(s) of the juristic person. The signature on every identification document must be the
same as the signature on the Subscription Form for Newly Issued Ordinary Shares with
Warrants.
Juristic Person Incorporated in foreign country
A copy of certificate of incorporation or memorandum of association or affidavit, certified
true copy by the authorized person(s) of such juristic person and affixed with the seal of the
juristic person (if any), together with a certified true copy of the alien certificate or passport
(as the case may be) of such authorized person(s) of the juristic person. The signature on
every identification document must be the same as the signature on the Subscription Form
for Newly Issued Ordinary Shares with Warrants.
All certified copies of each of the above documents must be notarized by a notary public and
authenticated by official of the Thai Embassy or of the Thai Consulate in the country where
the documents are prepared or certified. Such notary public certification and authentication
shall be made no more than months prior to the subscription date.
The subscriber must fill in the Suitability Assessment Form (Additional Enclosure 2.2), and Self
Declaration Form (Additional Enclosure 2.3) and Declaration Form of Status as a U.S. Person or
Non-U.S. Person (Additional Enclosure 2.4)
,QWKHHYHQWWKDWWKHVXEVFULEHULVRWKHU6HFXULWLHVFRPSDQLHVuFXVWRPHUZKRFRPpleted Know
Your Customer & Customer Due Diligence: KYC/CDD and Suitability Test within the last 2 years
prior to the Subscription Period, the subscriber will not be required to fill in the forms of Suitability
Assessment and Self Declaration, otherwise the subscriber is required to completely and clearly
fill and sign the forms of Suitability Assessment (Additional Enclosure no. 2.2) and Self
Declaration (Additional Enclosure no. 2.3) and submit to Subscription Agent as supplementary
documents to the subscription of newly issued ordinary shares with Warrants.
Page13Nok Airlines Public Company Limited
8.3 Refund of Subscription Payment (if any)
The Company by Subscription Agent shall refund the subscription payment for unallocated portion
to the shareholders by the following methods;
8.3.1 In case the oversubscribing shareholders do not receive full allocation due to the inadequate
newly issued ordinary shares
The Company by Subscription Agent shall refund the subscription payment for the portion of
the newly issued ordinary shares oversubscribed that have not been allocated due to
inadequate newly issued ordinary shares, without interest and any compensation, within 10
business days after the closing of subscription period by the following methods:
1) Transfer the refund to the bank account of the subscriber, who wishes to receive the
refund via bank transfer and indicates in the Subscription Form, within 5 business
days from the closing of the subscription period. Such bank account shall be either
saving account or current account of the following banks;
1. Bangkok Bank Public Company Limited
2. Krung Thai Bank Public Company Limited
3. Bank of Ayudhya Public Company Limited
4. KasikornBank Public Company Limited
5. CIMB Thai Bank Public Company Limited
6. TMB Bank Public Company Limited
7. Siam Commercial Bank Public Company Limited
8. Thanachart Bank Public Company Limited
9. United Oversea Bank (Thai) Public Company Limited
The name in bank account shall be the same as oversubscribing shareholder as
specified in the Subscription Form. The oversubscribing shareholder is required to
attach a certified true copy of either the front page of saving passbook or a statement
of current account or saving account which indicates account name and 10-digit
account number.
2) In the case that the Subscription Agent does not receive either a certified true copy of
the front page of saving passbook or a statement of current account or saving
account which indicates account name and 10-digit account number or the subscriber
does not indicate in the Subscription Form that he/she wishes to receive the refund
via bank transfer, the Company by Subscription Agent will refund the subscription
payment by issuing a crossed cheque payable to the subscriber of newly issued
ordinary share and delivering such cheque via registered postal mail to the address
appeared in the share register book on 28 April 2017 within 10 business days from
the closing of subscription period.
Page14Nok Airlines Public Company Limited
In the event that the Company could not make such refund within the said period, the
Company shall have a duty to return the said payment to the subscriber with the interest at
the rate of 7.5 percent per annum, calculated on the amount of such refund subscription
payment starting from the date after the said 10 business day period until the date on which
the payment is refunded. In any cases that the cheque has been deliver or the monies have
EHHQWUDQVIHUUHGWRWKHVXEVFULEHUuVDFFRXQWDVDSSHDUHGLQWKHVKDUHUHJLVWHUERRNRQ28
April 2017, it shall be deemed that the subscriber duly receives the refunded subscription
payment and the subscriber shall no longer be able to claim interest and/or compensation
from the Company or the Subscription Agent.
8.3.2 In case the subscribing shareholders do not receive the allocation due to failure to comply
with subscription conditions and/or to make the subscription payment
The Subscription Agent will return the cheque to the subscriber who has not been allocated
the newly issued ordinary shares due to a breach of any subscription conditions and/or
uncollectible payment via cheque. The subscriber must contact the Subscription Agent to
request the cheque back within 30 days after closing of the subscription period.
8.4 Delivery of the Newly Issued Ordinary Shares
Subscriber can choose one of the following delivery methods to be proceeded by the Company:
8.4.1 In case the subscriber wishes to receive share certificate in the name of subscriber
76'DVWKH&RPSDQ\uVUHJLVWUDUVKDOOGHOLYHUWKHVKDUHFHUWLILFDWHDFFRUGLQJWRWKHQXPEHU
of allotted shares to the shareholder by registered postal mail to the name and address
appeared in the share register book on 28 April 2017 within 15 business days from closing
of the subscription period. In this case, the subscriber will not be able to sell the allotted
shares in the SET until receiving of share certificate which may be after the date the newly
issued ordinary shares are permitted to trade on the SET.
8.4.2 ,QFDVHWKDWWKHVXEVFULEHUZLVKHVWRGHSRVLWWKHVKDUHVLQWKH,VVXHUuV$FFRXQW1R
7KH&RPSDQ\ZLOOGHSRVLWWKHDOORWWHGVKDUHVWRWKHDFFRXQWv7KDLODQG6HFXULWLHV'HSRVLWRU\
&RPSDQ\ /LPLWHG IRU 'HSRVLWRUVw ZKHUHE\ WKH 76' ZLOO UHFRUG WKH QXPEHU RI VKDUHV
GHSRVLWHGLQWKH,VVXHUuV$FFRXQWQRDQGLVVXHDQHYLGHQFHRIGHSRVLWWRWKHsubscriber
within business days from the closing of the subscription period. When the subscriber
wishes to sell newly issued ordinary shares, the subscriber must withdraw the said shares
from the Account No. 600, by contacting the securities company, where fees may incur
DFFRUGLQJWRWKH76'DQGRUVHFXULWLHVFRPSDQ\uVWHUPVDQGFRQGLWLRQV,QWKLVFDVHWKH
subscriber can sell the allotted shares in the SET as soon as the newly issued ordinary
shares are permitted to trade on the SET and after the subscriber has withdrawn the said
shares from the Account No. 600.
Page15Nok Airlines Public Company Limited
8.4.3 In case that the subscriber wishes to deposit the shares in his/her trading account opened
with the securities company
7KH&RPSDQ\ZLOOGHSRVLWWKHDOORWWHGVKDUHVWRWKHDFFRXQWv7KDLODQG6HFXUities Depository
&RPSDQ\/LPLWHGIRU'HSRVLWRUVwZKHUHE\WKH76'DQGWKHVHFXULWLHVFRPSDQ\ZLOOUHFRUG
the number of shares deposited and issue an evidence of deposit to the subscriber within
business days from the closing of the subscription period.In this case, the subscriber can
sell the allotted shares in the SET as soon as the newly issued ordinary shares are
permitted to trade on the SET.
For the case of 8.4.3, the name of the subscriber must be the same as the name of the
owner of the securities trading account that the subscriber wishes to deposit the allotted
shares, otherwise, the Company reserves the rights to deliver to subscriber such shares in
form of share certificate in the name of subscriber as described in 8.4.1.
The shareholder who exercises his/her right to subscribe the newly issued ordinary shares
must specify the code of the securities company (as listed on the back of the Subscription
Form) which the shareholder has the securities trading account with, and the securities
trading account number to which the shareholder wishes the allotted shares to be deposited.
If the subscriber provides incorrect code of the securities company and/or securities trading
account, the Company by Subscription Agent will not be responsible for any loss or delay in
retrieving the shares.
In the event that the subscriber does not complete those details or fail to specify the method for
share delivery in the Subscription Form, the Company hereby reserves the rights to deliver such
shares in form of share certificate. In this case, the subscriber may not be able to sell the
allotted shares in the SET as soon as the newly issued ordinary shares are permitted to trade
on the SET.
8.5 Other Information Regarding the Subscription of the Newly Issued Ordinary Shares with
Warrants
8.5.1 Shareholder who subscribes for the newly issued ordinary shares with Warrants will receive
a receipt for the subscription signed by the subscription officer as an evidence for the
subscription. The subscription shall be deemed to complete only when the Company fully
collects the subscription payment for the newly issued ordinary shares.
8.5.2 Shareholder who subscribes for the newly issued ordinary shares with Warrants and already
made subscription payment cannot cancel or revoke their subscription, unless prior written
consent is obtained from the Company.
8.5.3 If the number of the newly issued ordinary shares indicated by the shareholder in the
Subscription Form exceeds the amount of payment received by the Company, the Company
reserves the right to allocate the shares according to the subscription payment received.
Page16Nok Airlines Public Company Limited
8.5.4 If the number of the newly issued ordinary shares specified in the Subscription Form is less
than the amount of payment received by the Company, the Company reserves the right to
allocate the shares to each shareholder as it deems appropriate.
8.5.5 If the shareholder who subscribes for the newly issued ordinary share with warrant fails to
make the subscription payment or the Company cannot collect the subscription payment in
whole or in part, or LQ DQ\ FDVHV QRW GHHPHG WR EH WKH &RPSDQ\uV IDXOW ZLWKLQ WKH
subscription period and specified method of payment, or the subscribing shareholder does
not fully or clearly fill the Subscription Form, or the shareholder proceeds with subscription
method other than those indicated in this document, the Company shall deem that the
shareholder waives his/her right in subscribing for the newly issued ordinary shares with
Warrants, and the Company reserves the right not to allocate any shares to the said
shareholder.
Therefore, the shareholder must carefully follow the method of payment and proceed in
accordance with the conditions and procedures of subscription described above.
8.5.6 The Company hereby reserves the right not to allocate the newly issued ordinary shares
with warrant to any shareholder, if such allocation makes the proportion of foreign
shareholding to exceed 49 percent of the total issued shares of the Company. The said
shareholder may not receive the allocation of the newly issued ordinary shares with
Warrants or may only receive partial allocation thereof.
8.5.7 The Company reserves the right to alter the terms and conditions and methods of payment
for the subscription of the newly issued ordinary shares with Warrants and/or other details
relating to the subscription procedures as it deems appropriate and beneficial to the
subscription of the newly issued ordinary shares with Warrants.
9. Objectives of the Capital Increase
The proceed from capital increase by way of Rights Offering shares and Warrants totaling Baht 2,281
million will be used to improve operational efficiency and support expansion of new routes.
10. Benefit which the Company will Receive from the Capital Increase and Share Allocation
The offering of new ordinary shares is a vital source of funding for the Company business development
to compete with other airlines operators. The capital raised will be used to augment working capital,
improve operational efficiency, and support expansion of new routes, which will strengthen the
Company financial position and performance to further generate long-term return to the shareholders.
Page17Nok Airlines Public Company Limited
11. Benefits which the Shareholders will Receive from the Capital Increase and Share Allocation
11.1 Dividend policy
The Company has a policy to pay dividend at the rate of not less than 25 percent of its net profits
on separate financial statements after deducting corporate income tax and statutory reserves,
provided that there is no other necessity and the dividend payment does not materially affect the
&RPSDQ\uVQRUPDObusiness operation.
11.2 Subscribers of new ordinary shares issued in connection with this capital increase will be entitled
WR UHFHLYH GLYLGHQGV IURP WKH &RPSDQ\uV EXVLQHVV RSHUDWLRQV VWDrting from the date that
VKDUHKROGHUVuQDPHDSSHDURQWKHVKDUHUHJLVWer book.
12. Other Information Necessary for Shareholders in Exercising the Rights to Invest in the Company
Shares
12.1 Control Dilution
Effect to the existing shareholders from the issuance of Rights Offering shares with Warrants
x Existing shareholders exercise whole units of NOK-W1
The shareholders will not be affected because the issuance and offering of shares and
NOK-W1 are made to existing shareholders in proportion to their respective shareholdings.
x If non-existing shareholders exercise whole units of NOK-W1
If NOK-W1 is fully exercised by non-existing shareholders, the dilution effects to the
&RPSDQ\uVH[LVWLQJVKDUHKROGHUVFDQEHcalculated as follows:
Control Dilution = No. of shares issued upon the exercise of NOK-W1
(No. of current paid-up sharesNo. of Rights Offering shares
No. of shares issued upon the exercise of NOK-W1
= 156,250,000
625,000,000 + 625,000,000+156,250,000
= 11.11%
12.2 Price Dilution
Subsequent to the issuance of Rights Offering shares with Warrants to existing shareholders, if
the Rights Offering shares are fully subscribed and the Warrants are fully exercised, the price
dilution will be equal to 35.33%, which is calculated based on weighted average market price of
WKH&RPSDQ\uVVKDUHVGXULQJ EXVLQHVVGD\VEHIRUHWKHGDWHRIWKH%RDUGRI'LUHFWRUVu0HHWLQJ
No.2/2017 on 28 February 2017, i.e. from 6-27 February 2017, which equals to Baht 8.01 per
Page18Nok Airlines Public Company Limited
share. Therefore, the market price of the Company share after the offering will be equal to Baht
5.18 per share.
Price dilution = Market price yMarket price after the offering
Market price before the offering
Where:
Market price Weighted average market price RIWKH&RPSDQ\uVshares during
EXVLQHVV GD\V EHIRUH WKH GDWH RI WKH %RDUG RI 'LUHFWRUVu
Meeting No.2/2017 on 28 February 2017, i.e. from 6-27
February 2017, which equals to Baht 8.01 per share (Source:
SETSMART)
Market price after = Market pricex No. of current paid-up shares Rights Offering
the offering pricex No. of Rights Offering shares Exercise price of NOK-
W1 x No. of shares issued upon the exercise of NOK-W1)
No. of current paid-up sharesNo. of Rights Offering shares
No. of shares issued upon the exercise ofNOK-W1
= (8.01 x 625,000,000 ) +( 2.4 + 625,000,000) + ( 5 x 156,250,000)
(625,000,000 + 625,000,000 + 156,250,000)
= 5.18
Price dilution = 35.33%
12.3 EPS Dilution
Unable to calculate since the Company has suffered loss from operation.
Page19Nok Airlines Public Company Limited
Part 2 - Preliminary Information of Nok Airlines Public Company Limited
1. Name and Address of the Listed Company
Name : Nok Airlines Public Company Limited
Business Type : The Company and its subsidiaries (v7KH JURXS RI &RPSDQ\w)
operates budget airline orlow-cost airline business under the brand
Nok Air which provide domestic and international point-to-point air
transport services. The Company is a leading domestic low cost
carrier with most domestic coverage. Nok Air allows free seat
assignment, provides free snack set on board, and allows baggage
weight limit 15 kg without prevailing excess change.
Address : 183 Rajanakarn Building, 17th floor,South Sathorn Road, Yannawa,
Sathorn, Bangkok10120
Registration Number : 0107556000094
Telephone : 02627 2000
Fax : 0 2286 9830
Website : https://www.nokair.com
Registered and Paid-up : Baht 625,000,000 divided into625,000,000 ordinary shareswith a par
Capital value of Baht 1 per share
In case that 625,000,000 Rights Offering shares are fully subscribed
and 156,250,000 units of NOK-W1 are fully exercised, the Company
registered and paid-up capital will be increased to Baht 1,406,250,000
and the number of the paid-up shares will be increased to
1,406,250,000 shares with a par value of Baht 1 per share.
2. Business Type and Nature of Competition
Revenue Structure
According to the consolidated financial statements, the Company and its VXEVLGLDULHVu UHYHQXH
classified by type of business for the year 2014-2016 are as follows:
Page20Nok Airlines Public Company Limited
Consolidated Financial Statements 2014 2015 2016
Million Baht % Million Baht % Million Baht %
Revenues from transportation
- Scheduled flights 11,190.50 91.92 12,498.24 87.42 14,272.11 84.26
- Chartered flights 56.90 0.47 356.56 2.49 490.30 2.89
Total revenues from transportation 11,247.40 92.39 12,854.80 89.92 14,762.41 87.15
Total Ancillary revenues 1 717.20 5.89 897.81 6.28 1,463.21 8.64
Other revenues
- Interest income 100.60 0.83 44.46 0.31 36.61 0.22
- Others 109.20 0.90 499.13 3.49 676.09 3.99
Total other revenues 209.80 1.72 543.59 3.80 712.70 4.21
Total revenues 12,174.40 100.00 14,296.20 100.00 16,938.32 100.00
Remark: /1 Ancillary revenues include revenues from itinerary change, excess baggage, ticket booking and payment fees and
sales of snacks, drinks and souvenirs
Source: Audited Financial Statements for the year ended 31 December 2014-2016
TKH &RPSDQ\uV main source of revenues is derived from air transportation service which in 2016
totaled to Baht 14,762.41 million, equivalent to 87.15% of total revenue. Majority of transportation
revenue was from scheduled flight service which contributed Baht 14,272.11 million, or 84.26% of total
revenue. Nok Air offers extensive flights with 24 domestic routes covering primary, secondary and
feeder domestic routes in the country and 3 international routes, added with international flights from
Nok Scoot Airlines which fully operated in 2016 after the International Civil Aviation Organization
(ICAO) issued a red flag warning Thai Aviation over significant safety concerns, leading Nok Scoot to
postpone its plan to open new routes to Japan and South Korea, and focus on the 3HRSOHuV5HSXEOLF
of China instead, with the first flight operated in June 2015.
The Company and its subsidiaries also serve chartered flights, mostly to overseas. Such service is
offered in addition to scheduled flights in order to optimize utilization of the existing aircrafts. Revenue
from the chartered flights in 2016 was Baht 490.30 million or 2.89% of total revenue.
In 2016, ancillary service revenue was Baht 1,463.21 million or 8.64% of total revenue, which is not
very high, as it is the Company policy to set air fare that already covers main services, such as
minimum baggage allowance and snack on board with no additional charge to passengers, which is
RQHRIWKH&RPSDQ\uV key strategies to differentiate its services from other budget airlines.
Other revenue in 2016 was Baht 712.70 million or 4.21% of total revenues, which consists of interest
income, return of aircraft deposit and maintenance, and profit from sales and lease back of the
aircrafts and others.
2.1 Products and Services
1RN $LU RSHUDWHV D EXGJHW DLUOLQH XQGHU WKH v1RN $LUw EUDQG ZKHUH LW SURYLGHV GRPHVWLF DQG
international point-to-point air transport services. As of 31 December 2016, the Company has a
fleet of 32 leased aircrafts, including 22 Boeing 737-800, 8 Bombardier Q400s and 2 ATR-72s.
The Company receives investment promotional privileges under the Investment Promotion Act
Page21Nok Airlines Public Company Limited
B.E. 2520 (and Amendment) from The Board of Investment of Thailand (BOI) in the large mass
and cargo transport business. Details of the investment incentives are as follows:
1. Corporate income tax exemption on net profit generated from the consolidated BOI
promoted businesses of not exceeding 100% of the investment capital, excluding land and
revolving capital. The incentive is given for eight years starting from the date the business
begins to generate income.
2. The right not to include dividend received from BOI promoted projects with corporate
income tax exemption into taxable income throughout the corporate income tax exemption
period.
3. Exemption of import duty on imported aircraft
4. The right to allow foreign technicians or experts and their spouse and dependents to travel
to Thailand and work in the specified position within the timeframe allowed by the Board of
Directors (Section 25 and 26)
In providing outstanding services, Nok Air is recognized for its services like free seat assignment,
complimentary in-flight snacks and drinks and WiFi onboard service (in an aircraft with supporting
equipment) and free minimum check-in baggage allowance.
Nok Air provides extensive flight services covering every region across Thailand. At present, Nok
Air has the most domestic route coverage in Thailand. As of 31 December 2016, Nok Air flied 27
routes of which 24 routes are domestic flights, 3 international routes with a total of 603 flights per
week. To extend its wing to overseas territories, Nok Air signed the Interline Cooperation
$JUHHPHQWZLWK6LQJDSRUHuV6Foot Airlines which allowed Nok Air to sell tickets from domestic
destination such as Chiang Mai, Chiang Rai, Phuket, Udon Thani, Ubon Ratchathani, Nakhon Si
Thammarat in Trang, and Hat Yai to Singapore. The agreement enables passengers to buy 1
single ticket that covers destinations operated by these 2 airlines.
Page22Nok Airlines Public Company Limited
The company is also partnering with 8 leading airlines in Asia, under the Value Alliance, including
with Nok Airlines, Nok Scoot Airlines, Scooter Airlines, Cebu Pacific Airlines (including Cebgo
Airlines), Jeju Air, Tiger Air Singapore, Tiger Air Australia, and Vanilla Air in order to create a
network of routes within the Alliance. It also offers travel options that link Southeast Asia, North
Asia, as well as Australia for more convenience of passengers.
Nok Air offers flights from its main operation base at Don Mueang International Airport with a
focus to service flights on high demand routes as primary routes /1as well as flights on lower
demand but potentially grown routes as secondary routes /1and feeder routes./1 This is in line with
1RN$LUuVFRPSHWLWLYHVWUDWHJLHVWRSURYLGHWKHPRVWFRPSUHKHQVLYHFRYHUDJHLQ7KDLODQG$VRI
31 December 2016, Nok Air operates 603 return flights per week.
For international routes,Nok Air provides service to 1 route in Myanmar which is Don Mueang-
Rangoon. In 2015, Nok Air commenced 2 routes to Vietnam, including Don Mueang - Ho Chi
Minh City and Don Mueang-Hanoi. As of 31 December 2016, Nok Air operates 43 round trip
flights in this region.
Nok Air also emphasizes on the services to and from the northern, northeast and southern
regions. The locations of origin and destination airports in the north and northeast regions are not
affected by seasonal monsoon like those in the south. We can therefore regularly operate in
those regions all year round. Geographically, the north and northeast regions are closed to
neighboring countries in the Indochina region, namely Myanmar, Laos and Cambodia, which is
projected to see significantly increasing demand for air transport in the future. As of December
31, 2016, Nok Air operated 334 flights per week to and from airports of origin and destinations in
the north and northeast, 210 flights to and from the south, and 16 flights to and from the central,
representing 55%, 35%, and 3% of the total flights per week respectively. The remaining 7% of
our flights are operated to and from overseas origins and destinations.
In addition, Charter flight for group travelers or those who wish to travel to destinations out of
Nok AiUuVVFKHGXOHGIOLJKWVLVDOVRDYDLODEOH
2.2 Market Overview and Competition
Market Overview
As of 31 December 2016, there were 5 major airlines offering domestic flights in Thailand, that
can be divided into 2 categories; namely, full-service airline and budget and low-cost airlines.
Despite different business directions and strategies and despite different targeted groups of
/1
Announcement of the Ministry of Transport: Criteria for Domestic Route Service as of September 27, 2006 as follows:
Primary route is a route with total passengers over 300,000 a year which Department of Civil Aviation allows all Thai airlines to operate
commercial flights along these routes without any restriction of the number of airlines.
Secondary route is a route with total passengers between 50,000 and 300,000 a year and Department of Civil Aviation allows only three
airlines to operate commercial flights in these routes.
Feeder route is a route with total passengers less than 50,000 a year and Department of Civil Aviation allows only two airlines to operate
commercial flights in these routes.
Page23Nok Airlines Public Company Limited
customers, yet, with restricted routes and complementary services, these 2 categories indeed
clashed from time to time although the competition between the two may not be as intense as
that within the same category.
The full-service airlines segment sees 2 main operators; namely Thai Airways International
(including Thai Smile Airways) and Bangkok Airways. Both provide comprehensive services. The
low-cost airline segment includes 3 major players, namely Nok Air, Thai Air Asia and Thai Lion
Air, each with different market positioning and market share. In addition to the 5 airlines
mentioned above, there are another 2 airlines, Kan Air, a small full service airline with a base
operation in Chiang Mai and mainly serve in the northern zone, and Thai Viet Jet Airlines, the
low-cost international airlines based in Suvarnabhumi Airport, and offering airfreight services in
domestic and international routes.
Considering full-service airlines, Thai Airways Internationals the longest-serving airline and has
been widely known and recognized for its good quality services. Therefore, the airline can charge
higher price than others, which also reflect its Premium Airline service. The higher competition
and increasing popularity of budget airlines, Thai Airways International has to adjust its strategy
by opening Thai Smile Airways to provide light premium service, meaning full-service airline
operations, compromised services and at affordable price. Thai Smile Airways focuses its service
to international passengers who wish to connect to domestic flights.
Bangkok Airways, another major full service airline positions itself as a Boutique Airline. It
provides service in selected routes with uniqueness. One of its major competitive strategies is the
ownership of some airports, which enables the airline to maintain advantages in some routes.
In terms of low-cost airlines, Air Asia is the first to introduce such budget domestic airline service
with an outstanding low price offering. Its airfare, however, does not cover other additional
services related to aviation, including loaded luggage, advanced seat booking and advanced food
and drink order. Passengers who wish to use these additional services have to pay extra.
Thai Lion Air is the latest player who entered into the market in late 2013. Its strategic
differentiation lies on the price package that also includes various services, such as loaded
luggage, snack and advanced seat booking.
In differentiating itself from the crowd, Nok Air has positioned itself as a high quality budget
airline. Its airfare rate is slightly higher than competitors but this rate covers all travel-related
services, such as advanced seat booking, snack and loaded luggage. Passengers do not have to
pay extra for such services.
As for the newly launched airline in the last quarter of 2016, Thai VietJet Airline which is a low-
cost airline of VietJet Airline from Vietnam. It operates three domestic air carriers in Thailand,
Suvarnabhumi - Chiang Mai, Suvarnabhumi Airport y Phuket, and Phuket - Chiang Rai. It also
provides air transportation service between Suvarnabhumi and the airport in Vietnam with a
special focus on ticket price promotion strategy. Such strategy brings an attention from Thai
customers and also the customer group that price factor affects decision making.
Page24Nok Airlines Public Company Limited
In 2016, the number of Nok Air's passengers totaled 8.56 million, decreasing by 2.28% from the
previous year of 8.76 million passengers.
Competition
y Competition between full-service and budget airlines in the domestic service segment
Domestic flight operators in Thailand comprise 2 categories: full-service airlines and budget
airlines. The competition, however, sees no domineering operator. A major reason is that
low-cost airlines have greater flexibility to expand their fleets and routing. They can employ
smaller aircraft that better serves short-haul routes. During the past 4 years, full-service
airlines have gradually lost their market shares to budget airlines because the full-service
airlines cannot efficiently compete in pricing. The budget airlines tend to have more
passengers in the future.
y Competition among low-cost airline in the domestic service segment
Low cost carriers today focus more on point-to-point service. In the domestic service
market, major players are Nok Air, Thai Air Asia and Thai Lion Air, with increasing
popularity due to short travel time in which pricing has strong influence on decision making.
Competition among budget airlines therefore is more intense than that among full-service
airlines. New entrant, like Lion Air and VietJet Air, has therefore stolen some market share
from existing domestic airline service operators.
y Domestic routes
Domestic routes are divided into 3 main categories which are primary routes with more than
1,000,000passengers a year, secondary routes with 100,000y1,000,000 passengers a
year, and feeder routes with less than 100,000passengers a year. Details of domestic
flights and airline operators are as follows:
- Primary routes:Routes with high density of passengers without limitation of airline
operators. Most primary routes are operated by both full-service and budget airlines
due to high demand of travelers, such as Bangkok - Chiang Mai or Bangkok y Phuket.
Domestic airlines tends to operate flights on both routes. As of 31 December 2016, Nok
Air operates 325 flights per week for the primary routes.
- Secondary routes: Routes which the low cost airlines are dominant players. Since the
secondary routes are shorter than the primary routes, servicing with a large aircraft
may not be cost effective. Low-cost airlines usually own fleet friendly to serve short-
haul routes, thus, having advantage over full-service airlines. Nok Air and AirAsia are
the leaders in the secondary route market. As of 31 December 2016, Nok Air operates
196 flights per week for the secondary routes.
- Feeder routes: Mostly operated by the low cost airlines due to the same reason as the
service on the secondary routes. Nok Air is the airline that serves the largest number of
domestic routes and flights in the country as its fleet comprises of small aircrafts that fit
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