Budget airline AirAsia has received the green light to fly to neighbouring Thailand's capital Bangkok, a report said today, adding that the maiden flight will be in January.

"Our Bangkok regional flight (out of the Kuala Lumpur International Airport) will begin on Jan 15 next year," Tony Fernandes, AirAsia chief executive was quoted as saying by the Malay Mail newspaper.

Fernandes said AirAsia will continue to expand its regional and domestic destinations.

"We are hoping that the rights to destinations in Indonesia will be approved by the first quarter of 2004," he said.

AirAsia, which flew its first regional route on December 8 to Phuket, plans to float some 25 percent of its shares in late 2004 to fund an ambitious expansion plan and fight off competition.

Foreign stake

AirAsia said the initial public offering (IPO) would be issued "as early as September 2004" and that it is looking at raising US$600 million to US$1billion.

The carrier took delivery of two Boeing 737-300 aircraft in October, increasing its fleet to nine, and it aims to have 22 aircraft by late 2004.

It has held talks with Richard Branson's Virgin Blue Holdings on issues including the possibility of Virgin taking a stake in the local carrier.

AirAsia has successfully brought low-cost flights to intra-Malaysian travel despite initial forecasts of gloom by aviation analysts. - AFP