BANGKOK: -- Low-cost carrier One-Two-Go will suspend its operations from July 22 to September 15, making it the first airline victim of record oil prices.

Founder and CEO Udom Tatiprosongchai said the unrelenting rise in oil prices had forced the airline to shut down temporarily.

During this period there will be a reorganisation to prepare for a return to business.

"The company has been losing money for months, and we cannot continue like this," said Udom, adding that One-Two-Go would resume operations when the situation improved.

Two of its rival, Thai AirAsia and Nok Ai, are still in service but facing the same cost pressure.

Both have revised their business strategies and rescheduled some routes.

Udom said One Two Go had been operating based on actual costs while other players had different strategies. In a statement, One Two Go said high oil prices were hurting the global airline industry.

Airlines world-wide have cut 30 per cent of their flights and raised surcharges to stay in business.

One Two Go was the country's first low-cost airline, starting its service in December 2003 with a Bangkok-Chiang Mai flight.

It ran into trouble when one of its planes crashed in Phuket, killing 90 passengers. Rumours abounded that it could face regulatory problems due to its safety record.

Udom declined to comment on this issue.

Relatives of the victims in the Phuket crash have started a web-site to campaign for an investigation into Udom's business conduct.

It was alleged that Udom had misled pilots into flying unsafe planes and paid bonuses for those who worked beyond the legal maximum of flying hours.

Chaisak Angkasuwan, director-general of the Civil Aviation Department, could not be reached for comment yesterday.

--The Nation 2008-07-19