Will Thailand’s aviation troubles spill over to Singapore?

NokScoot might be under threat.

Singapore Airlines' low-cost carrier joint venture NokScoot might be adversely impacted by safety concerns plaguing Thailand's aviation sector, according to a report by OCBC.

After the Federal Aviation Authority's (FAA) downgrade of the Thai aviation secor, OCBC believes that the European Aviation Safety Agency as well as Asian regulators will follow suit in restricting Thai-registerd carriers.

"Thai-registered NokScoot, a JV between SIA’s subsidiary Scoot and NokAir, could be impacted by the expected rippling effect as a result of FAA’s downgrade," said OCBC.

However, NokScoot's youth and its limited number of destinations makes its impact to SIA negligible.

Meanwhile, Thailand's aviation troubles will have limited impact on Tigerair.

"For Tigerair, we believe the impact will be limited and insignificant on two key reasons. The first and most obvious is that it is not a Thai-registered airline. The second being post-restructuring, Tigerair is only operating out of Singapore and the only outbound direct flight destination from Thailand is Singapore. Hence, logically, any restrictions on Thai-registered airline placed by the neighbouring countries such as Japan, South Korea and China will not impact Tigerair," said the report.