Malaysian carrier remains keen on Vietnam's aviation market despite failure of fourth attempt at establishing a low-cost airline.
AirAsia is continuing to look for new partners for it to join Vietnam’s aviation market after the failure of its deal with local tourism company the Thien Minh Group, a representative from AirAsia told VET.
At the end of 2018, AirAsia announced its cooperation with the Thien Minh Group to establish a low-cost airline in the country.
Under the agreement, AirAsia would own 30 per cent of the new joint venture, which is the maximum a foreign company can own in Vietnam’s aviation industry.
However, in April, AirAsia issued a notice terminating its cooperation with the Thien Minh Group after more than a year of negotiations. It was its fourth effort to penetrate into Vietnam’s aviation market.
Previously, the Malaysian airline proposed cooperating with Pacific Airlines, the predecessor of Jetstar Pacific, but failed to agree to terms with its parent, Qantas. The next effort was undertaken in 2007 through a joint venture with the Vietnam Shipbuilding Industry Corp. (Vinashin), in which AirAsia contributed 30 per cent of the capital.
This partnership failed due to problems with licensing. Three years later, in 2010, AirAsia returned, attempting to cooperate with Vietjet Air, but failed due to the strict regulations in Vietnam’s aviation sector.
“The robust development of Vietnam’s aviation sector, which sometimes reaches double digits, means AirAsia will always have a ‘growth pass’ if it wants to enter,” said the AirAsia representative.
“We are still in the process of finding suitable new partners and negotiating to establish a joint venture in Vietnam.Despite the market being seemingly crowded with the entry of Bamboo Airways at the start of this year and several other airlines waiting in the wings, AirAsia expects that growth of 7-8 per cent in passenger volumes in the near future will create more opportunities.”
The carrier operates 16 direct routes to Vietnam, connecting Hanoi, Ho Chi Minh City, Da Nang, Nha Trang, Phu Quoc Island, and Can Tho with six destinations in Malaysia, Thailand, and the Philippines. Vietnam Economic Times