The board of directors of NokScoot (XW, Bangkok Don Mueang) has resolved to liquidate the loss-making carrier, its 49%-owner Scoot (TR, Singapore Changi) has said in a press release.

The Singaporean low-cost carrier, a subsidiary of Singapore Airlines Group, underlined that its Thai venture, which operated long-haul low-cost flights out of Bangkok Don Mueang, has not posted a profit since its founding in 2014. It said that the problems were caused by, among others, intense competitive pressures and that it could not see a path for the airline's recovery.

Scoot added that it had offered to sell its 49% stake to Nok Air (DD, Bangkok Don Mueang) for THB1 baht (USD0.03) but the offer was refused.

NokScoot operated seven B777-200(ER)s, all of them transferred from either Scoot or Singapore Airlines (SQ, Singapore Changi). Two have already been retired and are currently parked in Alice Springs, the ch-aviation fleets advanced module shows. The airline focused on serving main origin markets for tourists visiting Thailand, mainly China. As such, it was heavily hit in the first phase of the COVID-19 pandemic, in January 2020, when the Chinese authorities practically halted all outbound tourism.

Just a day before Scoot's announcement, NokScoot said that the persisting low demand for travel and grim perspectives for recovery, with demand not expected to return earlier than in 2022, would force it to "rationalise" its business. The carrier foresaw reducing its headcount by over 50% in the last-ditch effort at surviving the crisis.

NokScoot did not respond to ch-aviation's request for comment. The final approval of the liquidation is expected within the next two weeks.

Scoot said that the liquidation of its Thai venture would result in a one-off impairment charge of SGD123.6 million Singaporean dollars (USD88.7 million), resulting mainly from the write-off of the seven B777s operated by NokScoot.

The news about NokScoot's liquidation broke concurrently with the Civil Aviation Authority of Thailand's (CAAT) decision to offer additional relief to the sector by waiving all parking fees for the time being and reducing landing and take-off fees.

The 50% reduction in landing and take-off fees will also apply to all foreign operators flying to and from Thailand.

The CAAT added that while it would not waive or reduce passenger fees, airlines would be granted 90 days to pay them, instead of the current deadline of 15 days. On top of that, the government has yet to approve THB24.15 billion baht (USD782 million) worth of soft loans to eight major airlines in the country, excluding Thai Airways International (TG, Bangkok Suvarnabhumi). The Ministry of Finance okayed the loans in early June, but the cabinet has not yet voted on the proposal. NokScoot was due to receive THB3.5 billion (USD113 million).