Asia Aviation Plc (AAV), the major shareholder of Thai AirAsia Plc, informed the Stock Exchange of Thailand Wednesday that the company will not proceed with a share acquisition of Nok Airlines Plc, the operator of low-cost Nok Air.
The notification reverses a recent overture by AAV, which notified the SET on Feb 25 that it was considering buying shares in Nok Air from the billionaire Jurangkool family.
A statement issued by AAV chief financial officer Santhat Sanguandikul last month said there had been no written agreements, nor any actions taken, that were binding on AAV with respect to a possible share acquisition.
After media reports about the potential deal, the public raised concerns that a merger could create market dominance in the low-cost airline segment, prompting the Trade Competition Commission to warn that any agreement must abide by the Trade Competition Law to refrain from market domination.
Nok Air's stock plunged 9.9% to 2.36 baht Wednesday after the market acknowledged the news from AAV.
Nok Air and its subsidiaries reported a net loss of 3.97 billion baht in 2018, widening from 1.9 billion a year earlier. The low-cost airline reported revenue of 13.88 billion baht, down 6.1% from 2017.
Nok Air attributed the revenue drop to a declining number of charter flights to China, fierce market competition and higher fuel prices.
