AirAsia has just scrapped its joint venture plan to set up a low-cost carrier in Vietnam with local partners.
|AirAsia changes the plan to enter Vietnamese market
According to the Straitstimes, AirAsia told Bursa Malaysia that its wholly-owned subsidiary AirAsia Investment Ltd., together with Gumin Company Ltd. and Hai Au Aviation JSC, had agreed to terminate and release each other from all obligations under the transaction agreements in relation to the proposed joint venture in Vietnam, effective from April 17, 2019.
AirAsia stressed that it remains interested in operating a low-cost airline in Vietnam due to its favourable geographical location, expanding aviation market, and overall growth potential.
“The termination of the joint venture is not subject to the approval of the company’s shareholders and is not expected to have any financial impact on the net assets or gearing of the company.”
This is the third time within the last ten years that AirAsia is looking for a co-operation with a local partner. Earlier, the company announced intentions to establish a low-cost carrier in March 2017 and a memorandum of co-operation was signed with Hai Au Aviation and Gumin December 2018.
On February 13, AirAsia's co-founder and CEO Tony Fernandes sent a letter to Prime Minister Nguyen Xuan Phuc to request support in licensing procedures in order to launch the first commercial flight on August 1, 2019. The carrier also wanted to further explore investment opportunities in two airports in Central Vietnam, Chu Lai and Phu Bai.
Fernandes said Vietnam is one of the last remaining countries with a large population within the region where AirAsia is not present.
AirAsia is already the largest foreign airline in Vietnam by capacity, currently flying to five destinations in the country, including its latest addition of Phu Quoc.