The oxidation of a NiCr bond coat during air plasma spraying was controlled by designing a gas shroud system that attached to the plasma torch nozzle. Two nozzles, termed as “normal” and “high speed” nozzles examined the effect of nozzle internal design on the microstructure and phase structure of coatings. X-ray diffraction and SEM morphologies showed that the shroud system reduced the oxidation of NiCr particles during the spray process. Compared with conventional air plasma spraying, the argon gas shroud reduced the coating hardness because the volume fraction of partially melted particles increased. The high speed nozzle reduced the oxidation and hardness of NiCr coatings due to the increase of partially melted particles in the coatings.