Orient Thai Airlines says its low-cost operation is prepared for a dogfight with AirAsia and is ready to match any fares offered by the Malaysian-born carrier.

       ''We are prepared to go one step ahead of AirAsia and match its offerings both in terms of destinations and fares,'' Udom Tantiprasongchai, chief executive of Orient Thai Airlines, said in an interview yesterday.
         The carrier's no-frills airline, known as One-Two-Go, is scheduled to start service on Dec 5 with a Bangkok-to-Chiang Mai route at just 999 baht for a one-way ticket. The promotional rate will be valid  24 Dec 2003.
         AirAsia yesterday said it would charge ''less than 1,000 baht'' for the same services which it may start ''early next year''.
        
         Thai Airways International charges about 2,000 baht for a one-way ticket from Bangkok to Chiang Mai.

         Mr Udom, who has also had experience operating an airline in Cambodia, said One-Two-Go also intended to start operating scheduled services on the Bangkok-Kuala Lumpur route ahead of AirAsia.

          Orient Thai Airlines will be leasing as many as six 200-seat Boeing 757 jets to accommodate its low-cost operations as well as its mainstream international operations, Mr Udom said.

           The first 757 is due to arrive in the next few weeks to serve the ''One-Two-Go'' flights to Chiang Mai.

           ''Even though we will lose money, we have to do it to make ourselves known,'' Mr Udom said, noting that AirAsia was likely to apply conditions to whatever low-fares it would offer with only a limited number of seats being offered at an unrealistically low prices.

            ''On One-Two-Go, when we say 999 baht, it applies to all of the 200 seats on the 757 jet, period,'' he said.

              Mr Udom criticised Shin Corp, the telecommunications conglomerate founded by Prime Minister Thaksin Shinawatra, for letting a foreign airline use legal loopholes to set up a local carrier.

           ''When people asked whether I was concerned about confronting the influential Shin Corp group with Prime Minister Thaksin's backing, I said no, because I know we can compete well in business terms,'' he said.

            Shin paid 250 million baht for a 50% stake in AirAsia of Malaysia, which reduced its share in the carrier to 49%. The two companies have set up a joint-venture company in Thailand, known as AirAsia Aviation Co, to run the Thai businesses in compliance with Thai laws. Another Thai investor will hold the final 1% for majority Thai control.

            Meanwhile, Transport Minister Suriya Jungrungreangkit said yesterday that he would ease restrictions on fare setting to allow domestic conventional airlines to compete with the future low-cost carriers.

            Mr Suriya said that minimum airfares set by the Aviation Department would be terminated to allow full market competition. Maximum airfares would still be applied to protect consumers.

            Suthep Seubsantiwong, executive vice president for commercial affairs of Thai Airways International, said the national carrier remained committed to launching a low-cost airline next year.

           Capt Yothin Pamon-montri, chairman of PB Air, another privately owned airline, said his airline was not competing with the low-cost venture as it had different target customers.