A Thai holding company has been formed to keep Thai AirAsia flying after a shake-up in its ownership structure put the budget airline's license at risk, officials said today.

The budget carrier is a joint venture between Malaysia's AirAsia Bhd which holds 49 percent and Thai telecommunications giant Shin Corp, founded by Prime Minister Thaksin Shinawatra, which owns 50 percent.

The remaining 1.0 percent is owned by the carrier's executive officer Tassapon Bijleveld.

But the Thaksin family's US$1.9 billion sale of its stake in Shin Corp to Singapore's state-owned investment firm Temasek had caused AirAsia to fall foul of rules which state Thai-registered airlines must be at least 51 percent Thai-owned.

Shin Corp said today it had set up a new Thai joint venture, Asia Aviation Company Ltd, to invest in the carrier.

By mid-March

"The advance paid-up capital of 405 million baht (US$10 million) will be injected into Asia Aviation for purchasing the Thai AirAsia shares from Shin," Shin Corp said in a statement released to the Stock Exchange of Thailand (SET).

Asia Aviation would complete its purchase of the 50-percent stake in the airline by mid-March, the statement said.

Shin Corp holds a 49-percent stake in Asia Aviation with the rest owned by investor Sittichai Veerathummnoon, the statement said.

Transport ministry officials had warned the airline that it could lose its license if it did not find new Thai partners, but no ruling has been made by Thailand's Securities and Exchange Commission or the commerce ministry.