Thai drops low-cost carrier plans with Nok Air

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A month after announcing their partnership with Nok Air to launch a new low-cost carrier by mid-2013, Thai Airways now says that the plans have been dropped.

"Thai is to slow down plans of the low-cost carrier and focus on Thai and Thai Smile for the time being," says a spokeswoman who declined to elaborate on the situation.

The decision came after Thai's board agreed that launching a new carrier will not be part of its business plan for the year, because of its financial losses.

Thai media reported earlier that Nok Air's plans to launch international services in 2013 have been approved by Thai's board instead. Thai holds a 49% stake in low-cost carrier Nok.

The Star Alliance member told Flightglobal in July that it planned to launch a new low-cost carrier with Nok - a joint venture where it will hold a 49% stake. It will have a registered capital of 200 million baht ($6.4 million).

Nok Air, initially slated to focus on regional routes, was expected to help Thai compete against low-cost carriers such as Thai AirAsia, which have been gaining market share.

Thai posted a net loss of Bt10.2 billion for 2011, down from a net profit of Bt14.7 billion a year earlier.