A domestic airline being set up by AirAsia, the largest low-cost carrier in Southeast Asia, and Thien Minh Group, its partner in Vietnam, is scheduled to begin operations in August 2019, Bloomberg reported.
Illustrative photo.
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On December 6, 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 Tony Fernandes, AirAsia Group CEO when signing the deal.
The new airline would become the latest entrant following Bamboo Airways this year in Vietnam, a market dominated by state-owned Vietnam Airlines and private budget carrier VietJet Air.
The new airline plans to operate five or six Airbus SE A320 and A321 aircraft on domestic routes between Hanoi, Da Nang and other cities as well as for regional flights, and the fleet could expand to as many as 30 within three years, according to Bloomberg.
Under an agreement signed in March last year, AirAsia will hold a 30% stake in Hai Au Aviation and Gumin Co., headed by Thien Minh Group CEO and Hai Au Aviation CEO Tran Trong Kien, controls the remaining 70%, the Vietnamese businessman said.
The airline targets to have a market share of 20 – 30% within a decade, Kien stated.
AirAsia operates 141 return flights weekly on 13 routes - including six unique routes - connecting Hanoi, Ho Chi Minh City, Da Nang, Nha Trang and Phu Quoc with Kuala Lumpur, Penang and Johor Bharu in Malaysia, Bangkok and Chiang Mai in Thailand and Manila in the Philippines, and has carried 12 million passengers to and from Vietnam since entering the market in 2005.
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.
Bamboo Airways, with the backing of conglomerate FLC Group, would launch its first flight on December 29 after several delays.
