NokScoot’s board has decided to liquidate the company as it sees no path to recovery.
Shareholders will “deliberate the same resolution” at a general meeting to be held in “about 14 days”, says the airline.
It had on 24 June disclosed that it would return three of its seven Boeing 777-200s to Singapore Airlines by the end of June. Sources told Cirium that the company’s shareholders were in talks about winding up the joint venture.
The joint venture says it “has been operating in very challenging circumstances since its inception in 2014”, noting: “Some of the challenges include difficulties in growing the network and a very intense competitive environment.
“Unprecedented challenges arising from the Covid-19 pandemic have further exacerbated the situation. Consequently, the board of directors does not see a path to recovery and sustainable growth for the airline.”
As of 26 June, 425 employees have been retrenched with “full retrenchment benefits in compliance with Thai labour laws”, says NokScoot. “A small team of employees will stay on to manage and see through the liquidation process to completion, after which they will receive similar retrenchment benefits,” it adds.
A further update is to be provided once an administrator is appointed for creditors to lodge their claims.
Thai shareholder Nok Air says in a stock-exchange filing that NokScoot’s liquidation “poses no direct or indirect impact” to its own normal operations. Cirium has contacted Singapore Airlines for comment.