Malaysia's AirAsia inks pact to set up low-cost airline in VietnamMalaysian low-cost airline AirAsia Friday signed a deal with Vietnam's state-owned corporation, Shipbuilding Industry Group (Vinashin), to establish a new frills-free carrier to be known as Vina AirAsia in Vietnam expected to be operational in July next year.
The letter of intent for the joint venture with the initial investment of 30 million U.S. dollars was signed by AirAsia group chief executive officer (CEO) Auk Tony Fernandes and Vinashin's group chairman and CEO Pham Thanh Binh.
The signing was witnessed by Vietnamese prime minister Nguyen Tan Dung who is here to join in Malaysia's 50th independence celebrations.
"With 84 million people in Vietnam and the fact that the country is close to China which has a population of more than a billion, the potential is huge," Fernandes told reporters later.
AirAsia, which is Southeast Asia's largest budget airline, would have a 30 percent stake in the joint venture against Vinashin's 70 percent, according to him.
AirAsia had to settle for the 30 percent amount as Vietnamese regulations only allowed single foreign ownership of not more that 30 percent, Fernandes said.
Vina AirAsia, which will be the third affiliate airlines of AirAsia in the region after Thai AirAsia and AirAsia Indonesia, would have a fleet of 9 aircraft over the next 2 years, he said.
Vina AirAsia was still in the process of securing governmental and regulatory approvals to facilitate its operations, he said.
Fernandes further said that the new carrier would have a blue logo instead of the more familiar red.
"It's the Vinashin group's corporate color. It'll be the first time that we'll be having a blue logo," Malaysian national news agency Bernama quoted Fernandes as saying.
Vinashin is the largest shipbuilding company in Vietnam with more than 200 subsidiaries and 10 joint venture companies. Besides ship building, shipping, heavy industries and construction, it has been expanding its operations into other areas such as investment, financing and property development.