A new national civil aviation organisation will be set up within a month to regulate the country's airlines.
The move comes after South Korea, Japan and China banned new flights for Thai-registered carriers from entering their airspace.
Transport Minister Prajin Juntong said the new organisation will supervise policy and regulate the licence approval process for airlines. It will be separate from the Thai Department of Civil Aviation (DCA), he said.
The DCA will become a new department overseeing the service of airports and airlines.
The start date for the organisation complies with the one-month deadline which Prime Minister Prayut Chan-o-cha gave the Transport Ministry to tackle the problem, ACM Prajin said.
"In the first month, we must strengthen the regulator to be in line with international standards," the transport minister said.
China, Japan and South Korea banned new flights by Thai airlines after the UN's International Civil Aviation Organisation (ICAO) identified Thailand's carriers as a "significant safety concern".
The ICAO said safety concerns which it found in its most recent audit dealt mainly with air operator certification, issuing of operation specifications and hazardous goods transportation certification.
The DCA submitted an action plan outlining how it intends to fix the problems to the ICAO on March 2, but the ICAO replied by telling the department the plan needs revision.
ACM Prajin said all the problems pointed out by the ICAO should be solved within eight months.
A working team, led by Transport Ministry deputy permanent secretary Woradej Harnprasert, could have the draft structure — an outline of what the organisation plans to achieve — finished by Monday, the minister said.
ACM Prajin also said the Japan Civil Aviation Bureau had informed the DCA that it will consider lifting its ban on non-scheduled flights by Thai airlines because of the Thai government's determination to overcome the problems raised by the ICAO.
A Transport Ministry source said staff will meet the ICAO chief at the organisation's headquarters in Montreal, Canada to explain what Thai authorities are doing to address the issue.
Mr Woradej rejected reports the DCA in the past has too easily granted licences for new airlines, saying examination procedures were in line with international standards. However, he conceded the regulator is struggling to keep up with the booming aviation industry, and that the problem must be addressed.
Meanwhile, four airline executives yesterday met to discuss the problem.
The executives were Thai Airways International (THAI) president Charamporn Jotikasthira, Thai AirAsia chief executive officer Tassapol Bijleveld, Thai AirAsia X chief executive officer Nadda Buranasiri, and Nok Air chief executive officer of Patee Sarasin.
Singaporean authorities have now said they will strictly check THAI flights landing in the city state, said Charamporn Jotikasthira.