AirAsia considers launch in Cambodia, Myanmar and China

Airasia Considers Launch In Cambodia, Myanmar And China

Low-cost carrier AirAsia is planning to expand further in Southeast and East Asia and considers setting up subsidiaries or partnerships in Cambodia, Myanmar and China, AirAsia Group CEO and co-founder Tony Fernandes told Nikkei Asian Review.

The move comes after he repeatedly failed to establish a Vietnam affiliate in the past and now wants to focus on other parts of the region.

He said Cambodia was attractive due to its growing popularity as a tourist destination, and also because of the fact that the country does not restrict foreign ownership in the local airline industry unlike Vietnam. However, new carriers are required to invest up to $30 million in the country during the first three years, excluding aircraft.

On the other hand, Cambodia is already a quite saturated market with currently six active carriers and dozens of defunct airlines, most of which existed only for a few years.

Myanmar was also an interesting market because of tourism growth, Fernandes said, as well as China because this market was already critical for AirAsia with close to 20 per cent of its annual sales coming from Chinese destinations. China was also a “foreign investment-friendly economy,” he noted.

AirAsia Group currently has affiliate airlines in Indonesia, Thailand, India and Japan, with plans for a Philippine affiliate to be launched next year.

However, AirAsia’s shareholders seem to be skeptical about Fernandes’ plans of expansion into new territories. The group’s stock price at the exchange in Kuala Lumpur was 1.78 ringgit at close on November 22, a long way from its all-time high of 4.38 ringgit on February 1 last year.

For the second quarter this year, AirAsia Group posted its smallest quarterly net profit since 2014 mainly owing to losses in its Indian associate company and from unfavourable foreign exchange rates. The group also cut down its orders for new aircraft this year.

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Low-cost carrier AirAsia is planning to expand further in Southeast and East Asia and considers setting up subsidiaries or partnerships in Cambodia, Myanmar and China, AirAsia Group CEO and co-founder Tony Fernandes told Nikkei Asian Review. The move comes after he repeatedly failed to establish a Vietnam affiliate in the past and now wants to focus on other parts of the region. He said Cambodia was attractive due to its growing popularity as a tourist destination, and also because of the fact that the country does not restrict foreign ownership in the local airline industry unlike Vietnam. However, new carriers...

Airasia Considers Launch In Cambodia, Myanmar And China

Low-cost carrier AirAsia is planning to expand further in Southeast and East Asia and considers setting up subsidiaries or partnerships in Cambodia, Myanmar and China, AirAsia Group CEO and co-founder Tony Fernandes told Nikkei Asian Review.

The move comes after he repeatedly failed to establish a Vietnam affiliate in the past and now wants to focus on other parts of the region.

He said Cambodia was attractive due to its growing popularity as a tourist destination, and also because of the fact that the country does not restrict foreign ownership in the local airline industry unlike Vietnam. However, new carriers are required to invest up to $30 million in the country during the first three years, excluding aircraft.

On the other hand, Cambodia is already a quite saturated market with currently six active carriers and dozens of defunct airlines, most of which existed only for a few years.

Myanmar was also an interesting market because of tourism growth, Fernandes said, as well as China because this market was already critical for AirAsia with close to 20 per cent of its annual sales coming from Chinese destinations. China was also a “foreign investment-friendly economy,” he noted.

AirAsia Group currently has affiliate airlines in Indonesia, Thailand, India and Japan, with plans for a Philippine affiliate to be launched next year.

However, AirAsia’s shareholders seem to be skeptical about Fernandes’ plans of expansion into new territories. The group’s stock price at the exchange in Kuala Lumpur was 1.78 ringgit at close on November 22, a long way from its all-time high of 4.38 ringgit on February 1 last year.

For the second quarter this year, AirAsia Group posted its smallest quarterly net profit since 2014 mainly owing to losses in its Indian associate company and from unfavourable foreign exchange rates. The group also cut down its orders for new aircraft this year.

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