Nok Air has followed the lead of compatriot Thai Airways in filing for business rehabilitation amid the Covid-19 pandemic.

The filing is bad news for lessors insofar as it puts an automatic stay on creditor claims, which means no lease rentals will be forthcoming from Nok until at least 27 October, the date of the court hearing on the rehabilitation petition.

Eight lessors are exposed to Nok, which has a total leased fleet of 21 aircraft. The lessor with the biggest exposure by number of aircraft is GECAS, with six Bombardier Q400s, while BOC Aviation has the largest jet-aircraft exposure with four Boeing 737-800s.


On 17 July, Nok restored Nuanwan Bhuprasert to the role of chief financial officer, in which she had served from 2014 to 2016. Cirium understands that she has been involved in the discussions regarding rental deferrals with lessors.

Cirium confirmed with sources on 23 July that Nok had made token payments to several lessors of around half a million dollars. Those payments are almost certainly going to be the last that lessors see until at least 27 October.

“I would expect that the lessors are going to take their pound of flesh out of the airline, specifically in the return inspections on aircraft,” writes Ron Brickerd, managing director at BOSA-Thayaan Aircraft Services, in a 31 July LinkedIn post.

“The airline can count on the lessor enforcing every single provision of their leases. The airline can be sure that they will get ‘compliance’ from their lessors in regards to the bankruptcy provisions, but they are not likely to get much ‘co-operation’ from the lessors.”

Three lessors with exposure to Nok – Avolon, BOC Aviation and DAE Capital – also have exposure to flag carrier Thai Airways, which filed for business rehabilitation in May. That airline’s court hearing will be on 17 August.

Market sources have suggested that other airlines in Thailand could fail, or apply for business rehabilitation, if the Covid-19 situation does not improve enough, and this would put additional pressure on lessors with exposure there, especially if they also already lease to Nok and Thai Airways.

This analysis was written written by Michael Allen, Asia Finance Editor at Cirium.