Thai AirAsia (TAA) has scrapped a plan to diversify into commuter services that offer short-distance and interprovincial routes using turboprop aircraft.
"We've taken a hard look at the plan and found it not interesting to engage," chief executive Tassapon Bijleveld told the Bangkok Post.
Thailand's largest budget carrier earlier this year studied the possibility of establishing a commuter carrier, also termed a regional airline.
The commuter airline could allow TAA to create an integrated supply chain serving the entire spectrum of air travel — from long distance via the recently launched Thai AirAsia X to short haul by TAA and the new commuter carrier.
The plan was spurred by an offer to take over Siam General Aviation (SGA), a commuter airline that was grounded on March 30 with six Saab 340B turboprops, each with 34 seats, after its founder called it quits.
SGA had operated Nok Mini since 2009 as an associate airline of Nok Air, TAA's arch rival, with no equity participation.
Mr Tassapon said traffic volume on the secondary routes the proposed commuter airline would have served was adjudged to be too small, at least compared with the numbers TAA was looking for.
TAA is better off growing its business by concentrating on busier routes to larger cities in Thailand by deploying its Airbus 320 fleet, he said.
The decision not to start a commuter service would not be a lost opportunity, as several airports such as those in Nan, Loei and Lampang are to be upgraded to accommodate larger jet aircraft rather than being confined to turboprops, which can operate on short runways.
"When those airports are upgraded and demand presents itself, we could fly our A320s there,'' Mr Tassapon said.
TAA prefers a single type of aircraft — the single-aisle 180-seat A320 — while TAAX will stay with A330 wide-body jets.