The civil aviation committee has rebuffed calls to set a floor price for low-cost airline tickets following reports of "price dumping" by a carrier.
The committee, chaired by Transport Minister Arkhom Termpittayapaisith, made the decision at a meeting Wednesday, Chula Sukmanop, chief of the Civil Aviation Authority of Thailand (CAAT) and the Airport Department said.
The committee received a complaint from an unnamed carrier that some low-cost airlines were selling tickets at below cost price.
Chula: Competition good for passengers
The petition called on the committee to set a level playing field for low-cost carriers, Mr Chula said.
The panel disagreed with the proposal as cheap ticket prices were set for some seats on a flight, not all seats, he said.
Mr Chula said passengers would benefit from price competition.
However, the committee proposed the imposition of a ticket price ceiling for low-cost airlines which would establish a distinct price gap between low-cost carriers and full service operators, he said.
The CAAT was asked to formulate ceiling prices and propose them at the next meeting, he said.
Citing a survey, Mr Chula said low-cost airlines only issued tickets with prices lower than cost, or promotional prices, for a few seats on each flight. Other seats have incremental prices.
Some budget airlines push up their ticket prices to almost reach the levels of full-service operators, so a ticket price ceiling must be imposed, he said.
"The meeting also instructed the CAAT to ensure that airlines which push down ticket prices must not lower their service standards," Mr Chula said.
Meanwhile, budget airline Nok Air chief executive Patee Sarasin said authorities should give weight to the notion of a ticket floor price.
Some airlines came up with unrealistically low prices, which subsequently damaged the market, he said.
Such airlines might gain market share from unreasonably low prices, causing other carriers to close down, he said. They could then raise their fares when they become the sole operators, he said.