Tony Fernandes, AirAsia group chief executive, says the low-cost carrier would prefer not to invest in eastern Thailand's gateway airport to avoid raising anti-competitive concerns.
He said Tuesday in Bangkok AirAsia would prefer not to push forward with investment.
"If the government asks us to invest we will. We are meeting with it Wednesday to discuss the issue," said Mr Fernandes.
The move came after the company said on Monday it would invest close to 1.5 billion baht in Navy-operated U-tapao airport if it decided to go forward with the project, which would include a low-cost carrier terminal. The terminal would be primarily for narrow-body aeroplanes.
Having an airline-owned terminal could make the company liable to accusations it is blocking access of the facilities to other low-cost competitors, he said.
The airport should be a profitable investment for the public sector as long as low-cost carriers can guarantee a sizeable volumes of passengers.
"We will soon need another airport in Bangkok to land our flights, and U-tapao is basically Bangkok," said Mr Fernandes. The airport could serve as a credible alternative gateway to these cities once the planned 200-billion-baht link between Don Mueang, Suvarnabhumi, and U-tapao airports is in place.
He estimates the company has already invested US$200 million in U-tapao, a figure which includes two planes worth a cumulative $80 million.
While the planned investment is now on shaky ground, Mr Fernandes underlined the importance of building a low-cost hub in the region.
"People in China have never heard of U-tapao, but if you price it right they will come," he said. "No one heard of Bandung [Indonesia] before. We made it a destination by offering low-cost direct flights."
Mr Fernandes said he is planning to turn a number of Thai cities into destinations, just like with Bandung, but declined to comment further.
"If I tell you now, our competitors will start looking at those locations as well," he said.
The company wants to introduce long-haul flights to northern and eastern Europe by the second quarter next year.
"We are still looking for appropriate aeroplanes, but our first long-haul flight will be from Bangkok," said Mr Fernandes. "And tell Deputy Prime Minister Somkid Jatusripitak that if we ever go to the moon, we will do it from the Eastern Economic Corridor."
He denied entering the long-haul market would put AirAsia into direct competition with full-service airlines.
"We are not taking share from Garuda or Singapore Air, we are growing the pie, which is what we have been doing since we founded the company," said Mr Fernandes.
The company plans to attract a new set of customers to fly to Thailand by providing lower costs than its competitors and direct routes from cities like Prague, just like on its short-haul business, he said.
