AirAsia enters budget carrier market in Vietnam

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Malaysia’s low-cost airline AirAsia is launching operations in Vietnam in a local partnership, as cheap fares and rising incomes fuel a travel surge in the nation. The carrier said it set up a joint venture with Gumin Company Ltd and Hai Au Aviation to establish a low-cost carrier holding company.

AirAsia holds 30 per cent of the joint venture which will see total start-up investments of $43.8 million. Under the terms of the shareholders agreement, the joint-venture carrier will be based on the Hai Au Aviation license but will operate under the AirAsia brand and take off early next year.

Vietnam is the latest country to lure AirAsia, as the 28 per cent growth in passenger traffic was triple the pace in other Southeast Asian nations. The fifth-biggest market in the region has seen domestic traffic double since 2013, and the middle-class will comprise close to a quarter of its population by 2010, AirAsia said.

In Vietnam, AirAsia will mainly compete with VietJet, a highly successful, stock exchange-listed domestic low-cost carrier, as well as Jetstar Pacific, a budget airline joint-venture of Vietnam AIrlines and Australia’s Qantas.

AirAsia, which is on the way to become a pan-Asian budget airline,  over the last years established affiliates in Indonesia, Thailand, Philippines, India and Japan, and is betting on a low-cost, long-haul model for international travel through its AirAsia X unit.

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Reading Time: 1 minute

Malaysia’s low-cost airline AirAsia is launching operations in Vietnam in a local partnership, as cheap fares and rising incomes fuel a travel surge in the nation. The carrier said it set up a joint venture with Gumin Company Ltd and Hai Au Aviation to establish a low-cost carrier holding company.

Reading Time: 1 minute

Malaysia’s low-cost airline AirAsia is launching operations in Vietnam in a local partnership, as cheap fares and rising incomes fuel a travel surge in the nation. The carrier said it set up a joint venture with Gumin Company Ltd and Hai Au Aviation to establish a low-cost carrier holding company.

AirAsia holds 30 per cent of the joint venture which will see total start-up investments of $43.8 million. Under the terms of the shareholders agreement, the joint-venture carrier will be based on the Hai Au Aviation license but will operate under the AirAsia brand and take off early next year.

Vietnam is the latest country to lure AirAsia, as the 28 per cent growth in passenger traffic was triple the pace in other Southeast Asian nations. The fifth-biggest market in the region has seen domestic traffic double since 2013, and the middle-class will comprise close to a quarter of its population by 2010, AirAsia said.

In Vietnam, AirAsia will mainly compete with VietJet, a highly successful, stock exchange-listed domestic low-cost carrier, as well as Jetstar Pacific, a budget airline joint-venture of Vietnam AIrlines and Australia’s Qantas.

AirAsia, which is on the way to become a pan-Asian budget airline,  over the last years established affiliates in Indonesia, Thailand, Philippines, India and Japan, and is betting on a low-cost, long-haul model for international travel through its AirAsia X unit.

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