AirAsia plans to launch joint venture in Vietnam later this year

Malaysian budget airline AirAsia said it plans to launch a joint venture in Vietnam and wants the new carrier to start operations in the second half of this year.

The airline revealed the plan in April last year when it said it would team up with local businesses to catch up with the country’s travel boom.

AirAsia, the region’s biggest budget airline, signed an agreement with Hanoi-based Gumin Co and Hai Au Aviation to form the venture, Bloomberg cited its statement last year as saying.

The venture, initially expected to start flying in early 2018, will need investment of VND1 trillion ($44 million), with AirAsia contributing 30 percent and Gumin around 70 percent, the statement said.

"There is great potential for growth in Vietnam," it said, citing the country's fast-growing economy, sizable population, and its ranking as Southeast Asia's fifth largest aviation market after Indonesia, Thailand, Malaysia and Singapore, as well as being the world's fastest growing aviation market in 2015-2016.

Group CEO Tony Fernandes on Wednesday told ATW Plus that one of AirAsia’s goals is to “continue to grow our presence and market share” in the Southeast Asian region.

He highlighted the proposed Vietnamese airline as “the final piece of the puzzle to complete our ASEAN connectivity.”

AirAsia said its four ASEAN carriers in Malaysia, Thailand, Indonesia and the Philippines and its Indian affiliate all generated profits in the fourth quarter of 2017, the first time they have all achieved this in the same quarter, according to ATW Plus.

The airline has yet to reveal any details about the fleet for its new joint venture in Vietnam.

Vietnam’s aviation sector served 71.75 million passengers in the first nine months of last year, up 17.9 percent against the same period of 2016, and transported 833,000 tons of good, up 34.6 percent, official government data shows.