Malaysia’s AirAsia drops joint venture plan to set up base in China

KUALA LUMPUR

Sep 2, 2018-

AirAsia Bhd, Asia’s largest budget airline, said it has dropped plans for a joint venture to establish a low-cost carrier in China, in a setback for its plans to expand in the world’s second-biggest aviation market. The Malaysian airline had signed a preliminary agreement last year with Chinese state-backed financial firm Everbright Group and Henan province to set up a low-cost aviation base in Zhengzhou. But in a statement on Thursday, AirAsia said the memorandum of understanding with Everbright and Henan government had lapsed and “will not be extended”. It did not say why. “China remains an extremely important market for AirAsia, where we are currently the largest international low-cost carrier by capacity,” an AirAsia spokesman said on Friday. “We will continue to grow our presence in the market where we witness growing demand.” AirAsia has a strong presence in major Southeast Asian countries, as well as growing offshoots in India and Japan, but it has yet to enter the Chinese domestic market. Citing sources, Reuters reported in June that AirAsia had looked at options like buying an existing air operator’s certification to speed things up.

Chinese regulatory concerns over safety and quality mean there is a queue of multiple airlines waiting for start-up approvals.  (REUTERS)

Published: 02-09-2018 07:56

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