AirAsia announces plans to set up new LCC in Vietnam
Friday, 31 August 2007：Following AirAsia X, AirAsia has announced that it will be launching another overseas low cost carrier, and this time it has Vietnam in its sights with a new carrier called Vina AirAsia.
AirAsia, based in Malaysia, had earlier posted a sharp spike in growth for the 2007 financial year. On the back of this buoyant news, the new offshoot plans were unveiled by CEO Tony Fernandes.
In a statement released by the Malaysian carrier, it announced, “The new airline will be built on the successful low-cost model pioneered by AirAsia in this region.”
Dubbed Vina AirAsia, the new carrier will be developed in conjunction with Vietnamese state-owned ship building company Vinashin, and is set to become the third affiliate carrier in the region – after Thailand and Indonesia.
The state entity is set to help AirAsia with securing of governmental and regulatory approval, concessions, licences, certificates and any other government permissions of the sort.
In another cryptic release, Tony Fernandes hinted at the possibility of two more regional affiliates to be added to the stable “in due time”, but refused to comment further on which possible countries are pending in the pipeline.
Vinashin has traditionally been the largest shipbuilding company in Vietnam but is said to be expanding its operations into other areas, such as transportation services.
Whilst plans have yet to be completely finalised, it is expected that AirAsia will own 30% of the new company, whilst Vinashin will own the majority share of 70%.
Due to a 45% passenger volume increase from 2006, AirAsia had previously reported a 42% increase in profits for the 2007 financial year, as revenue jumped 79% to USD123 million, to bring about a net profit of USD52.9 million.