The code-sharing collaboration among three member airlines of the THAI group is expected to boost the group's overall revenue by 5% over the next two years.
The group consists of Thai Airways International Plc (THAI), Nok Air Plc and THAI Smile Airways Co.
Usanee Sangsinkeo, acting president of THAI, said the THAI group expects to meet its revenue projection within the next one or two years, once all three airlines are able to cover more routes under the code-sharing agreement.
Yesterday, Mrs Usanee of THAI; Piya Yodmani, chief executive of Nok Air; and Viroj Sirihorachai, acting chief executive of THAI Smile Airways, signed the code-sharing deal on a round-trip flight from Don Mueang to Mae Hong Son.
THAI owns 100% of THAI Smile and 29% of Nok Air.
Under the code-sharing deal, Nok Air will commence the Mae Hong Son service starting from March 25 with three flights a week at first, using ATR aircraft with 72 seats each.
"The move is expected to bring a further 20,000 passengers to Mae Hong Son province a year and help strengthen local tourism, especially in secondary provinces," Mrs Usanee said.
The collaboration will extend to other practices such as oil hedging, cost management, resource sharing, repairs and insurance.
For the revenue breakdown, 50% will go to Nok Air, 30% to THAI and 20% to THAI Smile.
Mrs Usanee said the three airlines will expand the code-sharing collaboration to other routes such as Suvarnabhumi-Nakhon Phanom, Suvarnabhumi-Sakon Nakhon and Suvarnabhumi-Phetchabun.
"In the future, the three airlines will expand their code-sharing collaboration under the THAI group for all domestic routes," she said.
The code-sharing deal is also expected to increase average cabin factor in the first quarter of this year.
The airline estimates cabin factor for 2017 at 80%, up from 73% in 2016, and forecasts this year's cabin factor at about 80%.
Cabin factor for the fourth quarter of 2017 is expected to be 81.3%, up from 77.3% in the year-earlier quarter.
Mrs Usanee said cabin factor during the Chinese New Year period is 83%, up from 80% in last year's season, as more Chinese tourists plan to visit Thailand.
THAI is considering resuming long-haul routes from Bangkok to Los Angeles and San Francisco this year if the US Federal Aviation Administration removes its warning on Thailand's aviation sector in March.