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AirAsia plans low-cost airline in Vietnam
19:00 04/03/2009

Malaysia’s AirAsia, the largest budget airline in Southeast Asia, has signed an agreement with Vietnam’s largest shipbuilder to establish a joint venture no-frills carrier in Vietnam.
  Vietnam Prime Minister Nguyen Tan Dung (R) and AirAsia’s CEO Datuk Tony Fernandes admiring an AirAsia model plane at the signing on Friday (Source: vnexpress)  

Of Vina AirAsia’s US$30 million in capital, AirAsia would hold a 30 percent while the state-owned Vietnam Shipbuilding Industry Group, or Vinashin, would control the rest, according to an agreement signed by the two parties Friday.

Vinashin will assist the JV in securing governmental approvals, concessions and licenses necessary for the joint venture. 

The new airline would serve domestic, regional and international routes, and eventually build two distinct divisions to facilitate short and long-haul aviation, according to AirAsia. 

The new airline will be built on the successful low-cost model pioneered by AirAsia in the region, said a company representative. 

AirAsia’s chief executive officer Datuk Tony Fernandes, who signed the agreement with Vinashin CEO Pham Thanh Binh, said the joint venture would explore the possibility of expanding to the lucrative air travel market in China.  

Speaking after the signing ceremony witnessed by visiting Vietnamese Prime Minister Nguyen Tan Dung, Fernandes was confident that the partners would enjoy a productive and profitable relationship.

“The growth potential in Vietnam's air travel is significant with its 84 million population,” he said, as quoted by Malaysia’s The Star newspaper.

“We are very excited to be working with a colossal corporation in Vietnam to develop this opportunity,” he was quoted as saying.  

According to Fernandes, the partnership would help develop the tourism industry in Vietnam. 

“We will continue to offer low fares to benefit our passengers and help boost the tourism economy, which will drive inbound passenger traffic in both countries,” he said.  

Binh said Vina AirAsia expected to launch its first flight in July next year using the A320 Airbus jumbo jet, the world’s largest airplane.

More requirements ahead

To turn their scheme into reality, Vinashin and AirAsia have to submit an official application to the Vietnamese aviation management agency to get an air transportation permit.

Vietnam encourages foreign investment in aviation, Lai Xuan Thanh, deputy head of the Vietnam Aviation Department said, adding the appearance of an additional low-cost airline besides the current Pacific Airlines would help increase competitiveness and improve service quality.

However, Thanh told local media Friday that his department had yet to receive Vina AirAsia’s application for operations approval.

According to Decree 76 issued by the Vietnamese Government in May this year, airline company must have minimum capital of VND500 billion (US$30.8 million) to operate international flights from Vietnam.

Besides the required capital, the applicant must meet several safety and security requirements, Thanh stressed. “There is no exception for a low budget airline.”

Thanh said his department verifies whether applicants meet such requirements before submitting applications to the government for approval.

“If everything goes smoothly, it will take one month to get the license,” he said.

Thanh said that no applications had been sent to his department since the issuance of Decree 76.

After six years of operations, AirAsia now has two affiliates, Thai AirAsia and Indonesia AirAsia, with 57 airplanes operating 75 local and international air routes to and from Malaysia, Thailand, Indonesia, Macau, China, Singapore, Cambodia, the Philippines and Vietnam.

AirAsia currently operates two daily Hanoi-Bangkok flights and one daily Hanoi-Kuala Lumpur route.

Source: Thanh Nien, VnExpress, Tuoi Tre – Compiled by Thu Thuy



Source : thanhniennews.com


 
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