AirAsia Group to launch China, Vietnam operations

AirAsia Group plans to launch its latest franchises in China and Vietnam later this year, as its current overseas affiliates demonstrate stronger financial performance. AirAsia has taken steps to establish joint venture (JV) frameworks in China and Vietnam, and during its latest earnings presentation the group said it wants the new carriers to begin operating in H2 2018 “after obtaining the necessary approvals.” Group CEO Tony Fernandes said one of AirAsia’s goals is to “continue to grow our presence and market share” in the Association of Southeast Asian Nations (ASEAN) region. He highlighted the proposed Vietnamese airline as “the final piece of the puzzle to complete our ASEAN connectivity.” The group has yet to reveal details about aircraft fleets for the two startup carriers. AirAsia said its four ASEAN carriers—in Malaysia, Thailand, Indonesia and the Philippines—and its Indian affiliate reported operating profits in Q4, the first time they have all achieved this in the same quarter. The other JV in Japan is still in the early stages after beginning operations in October. Fernandes particularly mentioned the turnaround of AirAsia Philippines, which has “proven that perseverance and our business model truly works,” he said. Philippines AirAsia achieved an operating profit of 665.3m pesos ($12.8m) in 2017, despite numerous one-off costs and 37% capacity growth. This unit is targeting an IPO in H2 2018.<br/>