Kuala Lumpur-based low-cost powerhouse AirAsia has signed a deal to establish a budget carrier in the China, giving its pan-Asian network a valuable foothold in a region set to become the world’s biggest aviation market.
The Malaysian airline said Monday it had signed a memorandum of understanding to establish the new low- cost carrier with financial giant Everbright Group and Henan Government Working Group. The deal was signed Sunday at a high-powered ceremony involving government and company officials, including the Malaysian Prime Minister.
The joint venture will be based in Zhengzhou, the capital of Henan province in central China and a city with a population of more than 9.3 million.
The deal will see the new company invest in aviation infrastructure that includes a dedicated low-cost terminal at Zhengzhou airport, a training academy for pilots, crew and engineers as well as a maintenance repair and overhaul facility.
“This Chinese venture represents the final piece of the AirAsia puzzle,” AirAsia Group chief executive Tony Fernandes said in a joint announcement about the project. “In just 16 years, we have successfully built a presence in Malaysia, Thailand, Indonesia, Philippines, India and Japan, with China closing the loop on all major territories in Asia Pacific.
“AirAsia can now live up to its name as the only airline that connects travellers across Asia Pacific – from China, Japan and South Korea in the north, Australia and New Zealand to the south, India and the Middle East to the west, and Asean at the centre – representing an unbelievable foundation to drive growth for our partners and catapult change in the region.’’
Fernades said AirAsia chose Zhengzhou as a base due to its strategic location and importance as a logistics hub.
“As China’s gateway to Europe, Zhengzhou sits at the centre of a vast rail, highway and air transport network that forms the linchpin of China’s development plans for its central and western regions,’’ he said. “With President Xi Jinping’s vision for One Belt, One Road, Zhengzhou is set to become even more important, not least as the heart of low-cost air travel in North Asia.’’
AirAsia has been spreading its wings globally and Fernandes last week told CNBC that flights by long-haul arm AirAsia X to the US West Coast were “not too far way’’.
AirAsia X is due to start flights to Hawaii in June and executives have floated plans to resume flights to London, with speculation in February that a Kuala Lumpur-Gatwick service could start as early as this year using leased Boeing 777s.
However, AirAsia X chief executive Benyamin Ismail said the focus was still on using the airline’s new A330neos, due in 2018 or early 2019.
