BANGKOK - THAILAND'S low budget airline One-Two-Go announced that it was suspending its operations for eight weeks, to allow time for financial restructuring.

Services will stop from July 22 until Sept 15 as the impact of high fuel prices hits the no-frills carrier.

'One-Two-Go have been affected by fierce price competition, other surcharges and continued high fuel prices and local political turmoil,' the company statement said on Saturday.

'The airline executive must be prudent and map out a new strategy focusing on its customers,' it added.

One-Two-Go is Thailand's first budget airline, launched in December 2003.

But the airline has suffered from a poor safety record after a McDonnell Douglas MD-82 jet crashed last September, killing 89 passengers.

Bad weather caused the aircraft to career off the runway and burst into flames on the holiday island of Phuket.

The fuel surcharge levied by airlines rose on July 5 to 850 baht (S$34) per trip from 750 baht because of oil prices which reached record highs of US$147 (S$199) per barrel a week ago but have since eased to around US$130.

According to its website One-Two-Go flies to six domestic destinations from Don Muang airport in Bangkok including Chiang Mai, Chiang Rai, Surat Thani, Nakhon Si Thammarat, Phuket and Hat Yai. -- AFP