An airline spokesperson said it would not make any announcement or statement following the Council of State's ruling on Tuesday that Thai AirAsia had violated the law earlier this year with foreign shareholding exceeding the statutory limit of 51 per cent.

The violation took place when Temasek Holdings' investment arms took over Shin Corp Plc, which then owned 50 per cent of Thai AirAsia. Combined with the 49-per-cent foreign stake owned by Malaysia's AirAsia, direct and indirect foreign ownership in the Thai airline increased to around 75 per cent.

However, the Council of State ruled that the Civil Aviation Department was authorised to pressure Thai AirAsia to restructure its shareholding and allow the company to retain its aviation licence.

The airline's spokesperson quoted chief executive Tassapon Bijleveld as saying Thai AirAsia was a Thai company and able to keep the licence issued by the Civil Aviation Department.

"The issue is already over," Tassapon was quoted as saying.

However, consumer-group representative Rosana Tositrakul said neither the Civil Aviation Department nor the transport minister had the authority to allow the company to retain its aviation licence.

"The Council of State ruled that Thai AirAsia violated the law from January 23 to February 14. The licence [should have been] revoked immediately, and then the company could have restructured its shareholding.

"It was illegal to allow the company to keep the licence while it was restructuring its shareholding structure," she said.

She also noted that legally, the majority stake of an aviation company must be held by minor shareholders, but in Thai AirAsia's case 50 per cent was owned solely by a company called Asia Aviation.

Asia Aviation was formed by Shin Corp as a 49:51 joint venture with local businessman Sittichai Veerathummnoon, in order to solve Thai AirAsia's foreign-ownership problem. Later, there were claims that Asia Aviation was just a dummy, because its registered office was empty and full of discarded equipment.

Despite all of this, the Civil Aviation Department is satisfied with Thai AirAsia's changed shareholding and has announced it will fine the airline for the period during which its foreign shareholding exceeded 49 per cent.

It is expected the department will press for penalties of not more than Bt4,000 for each day the airline contravened the law. The department had been awaiting the Council of State's ruling before fixing the penalty.

Suchat Sritama,

Chularat Saengpassa

The Nation