Low Cost AirlineNok Air

Presented by Group 3

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Industry Background• Liberalization (Open sky)

• Government subsidized tourism business

• Air transportation– National Airline– Secondary Airline– Low Cost Airline

• Pricing strategy

Industry Background• Low Cost Airline

– Thai Air Asia• Shin Corp (51%)• Air Asia Malaysia (49%)

– One two go• Orient Thai (100%)

– Nok Air• Thai Airways (39%)• Crown Property Bureau, Krungthai Bank,

Private investors and Dhipaya Insurance (61%)

Company profile• Registered under Sky Asia Co.,Ltd.• A joint venture between public and private investors.

– Thai Airways International Public Company Limited, - CPB Equity Company Limited,- SCB Securities Company Limited, - Krung Thai Bank Public Company Limited, -Dhipaya

Insurance Public Company Limited, -Goverment Pension Fund, - Thailand Prosperity Fund by ING Funds (Thailand) Company Limited,- King Power International Company Limited, - Individual investors

Company profile (cont.)• Offer the same safety standard as Thai

Airways International• Nok Air will be flying to all parts of Thailand,

with Chiang Mai, Hat Yai, Udon Thani, and Phuket as the planned destinations during 2004

VisionWith Nok Air, air travel will no longer be expensive for Thais. Nok Air will help enhance the quality of life for Thais to be comparable of those in other developed

countries. Thais will now be able to explore the beauty of our own countries, families will now have more

opportunities for reunion and business travelers will now be able to pay more sensible

prices for airfares.

SWOTStrengths

– High number of distribution channels – Strong backup– Best Human Resource – Best service quality – Brand awareness– Effectiveness in space management on flight– High level of employee quality

SWOT

Weaknesses– Price– Low experience of management team– Bad cash flow problem– Low level of advertising

SWOTOpportunities

– High number of demand – Convenience and faster – Joint promotion – Higher growth rate – Growth rate increasing by Hong Kong and Ma

Gout traveler with high number of booking rate

– Government support open sky policy

SWOTThreats

– High number of competitor in the Market– Singapore government support low cost airline in the

country– Price war with promotion war– Boring about long time booking (behavior change) – Payment Policy– Confirmation Process – Fuel cost increasing– 20% increase for airline tax

Target Customer

• Local Thai

• international tourists

• family visitors

• leisure and business travelers

Product

• Destination– Chiang Mai– Udon Thani– Phitsanulok– Phuket– Had Yai– Khon Kaen (Future Route)

Flight Schedule

Nok Air Route Map

Services• Call Center Number:

– Call 1318 (Operating hours from 8.00 - 21.00)

• Channels to Book : – Website, Call Center, and Airport Ticket Office

• Channels to Pay – Cash at 7-Eleven Counter Service Plus,– Master/VISA card online, and via the call center, – Direct transfer at SCB ATM,– Also many more channels to come in the future

Comparison of Pricing Strategy

NOK Air Air Asia 1-2-Go

•First come – Lowest Price*

(No other promotion)

•First come – Lowest Price*•Period discount

•One pricing strategy*•Period discount

* Price excluding Airport Tax and fee

Promotion

• Flight attendance contest

• Public Relation

• Advertising– Radio– Magazine

Ad. SpendingAd.Spending 2000 2001 2002 2003 2004

Total Ad. 499,590,000 295,412,000 217,476,000 363,360,000 293,657,000

Air Asia       4,553,000 30,346,000

Nok Air         6,246,000

Orient Thai       1,667,000 7,127,000

Key success factors

• Providing clear information especially on “price”

• Safety assurance

• Route provide

• Service provided on board

• On time schedule

Thank you