AirAsia is in talks with companies in Vietnam about establishing a new low-cost carrier in the country.
Vietnam News Service (VNS) reports that the Malaysia-based group has signed an agreement with Vietnam’s Hai Au Aviation and Tran Trong Kien to create a new joint venture. The new AirAsia Vietnam, which has not been officially named, could start flying as early as the beginning of 2018.
AirAsia will hold a 30% stake in the airline while Gumin, the parent company of Hai Au and Tran Trong Kien, will hold 70%.
The creation of a Vietnamese LCC will mark the completion of a long-term goal for Tony Fernandes, AirAsia’s group CEO. The company was previously on the verge of entering the Vietnamese market in partnership with Vietjet, before the Vietnamese airline launched on its own in 2011.
Once it does enter Vietnam however, AirAsia it will face severe competition from Vietjet, which has expanded rapidly since its launch, and Jetstar Pacific, which is backed by Vietnam Airlines and Qantas.
Vietnam will join AirAsia’s existing short-haul subsidiaries in Malaysia, Thailand, Indonesia, the Philippines and India, with a new carrier also expected to launch in Japan in the near future.