AirAsia’s Thai arm has scrapped all scheduled domestic flights until the end of July.
Although Phuket has reopened for vaccinated foreign visitors, the country is battling a widespread wave of Covid infections.
It hit a record of more than 9,000 cases on Saturday.
"We will continue to monitor the situation closely and will be prepared to reinstate our scheduled flight services again as soon as possible," Thai AirAsia said.
The carrier’s main hub Bangkok has been hardest hit by Covid infections.
From 12 July, it will operate only a few charter or cargo flights.
Thai AirAsia’s traffic steadily fell in May and June as the latest Covid wave and resulting lockdowns saw only a handful of flights operated compared to April.
In addition, the Civil Aviation Authority of Thailand ordered all airlines to suspend night flights between 9pm and 4am in keeping with various curfews in effect in Bangkok and other provinces.
