Airlines AirAsia plans to open Chinese subsidiary
The Malaysian low cost carrier AirAsia is planning to enter China, one of the last untapped markets for LCC in Asia. China Everbright Group, the Henan Working Group and AirAsia have announced the signing of a memorandum of understanding to establish a low-cost carrier in China as a joint venture.
AirAsia and its Chinese partners plan to establish a budget airline, a dedicated low-cost carrier terminal, an aviation training academy and a MRO facility.
“Zhengzhou sits at the center of a vast rail, highway and air transport network that forms the linchpin of China’s development plans for its central and western regions,” said Tony Fernandes, the co-founder and chief executive of AirAsia, who has been trying to enter the Chinese market for years.
AirAsia announced the joint venture proposal during the Belt and Road forum, a high-level initiative designed to promote infrastructure investment connecting China with the rest of Asia and beyond. The airline stated it is exploring the possibility of using the Comac C919, China’s rival to the Airbus A320 and Boeing 737. AirAsia already operates joint ventures in India, Indonesia, the Philippines and Thailand and is about to relaunch its activities in Japan. It also has recently announced plans for a joint venture in Vietnam. Less than 10% of the Chinese market is operated by low cost carriers such as Spring Airlines, compared to 56% in Southeast Asia and 40% in Europe.
The Malaysian airline and its subsidiaries operate a fleet with Airbus A320 family aircraft and A330 for its long-haul subsidiary AirAsiaX. AirAsia which is one of the largest Airbus-operator in the world still waits for over 400 ordered Airbus A320neo and A321neo aircraft.