Business
AirAsia abandons plan to set up low-cost carrier in Vietnam
The company, nonetheless, remains interested in operating a low-cost airline in Vietnam due to its favorable geographical location, expanding aviation market and overall growth potential.
AirAsia, the largest low-cost carrier in Southeast Asia, informed it has terminated an agreement to launch a domestic airline in Vietnam with local partners, according to the airline’s filing with Bursa Malaysia.
Following the announcement, AirAsia Gumin Company and Hai Au Aviation have amicably agreed to terminate and release each other from all obligations under the transaction agreements in relation to the proposed joint venture in Vietnam, effective April 17, 2019.
"The company, nonetheless, remains interested in operating a low-cost airline in Vietnam due to its favorable geographical location, expanding aviation market and overall growth potential,” it said.
According to AirAsia, the termination of the joint venture is not subject to the approval of its shareholders and is not expected to have any financial impact on the net assets or gearing of the company.
In a tweet early on Thursday, AirAsia Group Chief Executive Tony Fernandes said Vietnam remains “very much in the plan”.
Fernandes added that he is still optimistic of AirAsia being in Vietnam by the end of the year.
Previously, AirAsia had a plan for the new airline to begin operation in August 2019.
Last December, AirAsia signed an agreement with Thien Minh Group and Hai Au Aviation Company to set up a domestic airline. The signing was conducted on the sidelines of the Vietnam Travel and Tourism Summit 2018 in Hanoi.
“AirAsia is an ASEAN airline and in ASEAN, Vietnam is one of the last remaining countries with a large population we’re not in. Today’s memorandum reaffirms our commitment to making AirAsia in Vietnam happen,” said Fernandes when signing the deal.
Vietnam currently has five airlines, including national carrier Vietnam Airlines, budget operator Jetstar Pacific Airlines (partly owned by Vietnam Airlines), budget carrier Vietjet Aviation, Vietnam Air Services (VASCO) and the startup carrier Bamboo Airways.
Illustrative photo.
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"The company, nonetheless, remains interested in operating a low-cost airline in Vietnam due to its favorable geographical location, expanding aviation market and overall growth potential,” it said.
According to AirAsia, the termination of the joint venture is not subject to the approval of its shareholders and is not expected to have any financial impact on the net assets or gearing of the company.
In a tweet early on Thursday, AirAsia Group Chief Executive Tony Fernandes said Vietnam remains “very much in the plan”.
Fernandes added that he is still optimistic of AirAsia being in Vietnam by the end of the year.
Previously, AirAsia had a plan for the new airline to begin operation in August 2019.
Last December, AirAsia signed an agreement with Thien Minh Group and Hai Au Aviation Company to set up a domestic airline. The signing was conducted on the sidelines of the Vietnam Travel and Tourism Summit 2018 in Hanoi.
“AirAsia is an ASEAN airline and in ASEAN, Vietnam is one of the last remaining countries with a large population we’re not in. Today’s memorandum reaffirms our commitment to making AirAsia in Vietnam happen,” said Fernandes when signing the deal.
Vietnam currently has five airlines, including national carrier Vietnam Airlines, budget operator Jetstar Pacific Airlines (partly owned by Vietnam Airlines), budget carrier Vietjet Aviation, Vietnam Air Services (VASCO) and the startup carrier Bamboo Airways.
