A plan to set up Thai Smile Airways Co as a subsidiary of Thai Airways International has been sent back to the national carrier by the Transport Ministry for further study.
Deputy Transport Minister Prin Suwanatat said after a meeting with THAI executives on Thursday that THAI was ordered to give more details of the plan and resubmit it to a meeting next week.
The ministry's main concern was its affect on the revenue of THAI as Thai Smile plans to launch or take over some domestic and regional destinations from its parent.
Thai Smile is a business unit of THAI. The company has been pushing THAI to set it up as a subsidiary so that the national carrier would wholly own the new firm and have better control of costs and generate more profit.
Thai Smile Airways Co would be set up with registered capital of 1.8 billion baht and use Airbus aircraft.
"THAI should outline a plan on how to generate revenue to offset those routes which will be operated by Thai Smile in the future," Gen Prin said.
Destinations to be launched next year by Thai Smile include Chiang Mai, Luang Prabang, Hong Kong and Siem Reap.
THAI plans to surrender nine routes to Thai Smile including flights to Koh Samui and Bodhgaya and Varanasi in India.