AirAsia's China ambitions suffer a blow after deal collapses

AirAsia's planned foray into China for a wider regional footprint suffered a setback after Southeast Asia’s largest budget airline failed to secure a deal with its local partners to tap the world’s second-biggest aviation market. A preliminary agreement signed last year for a venture with China Everbright Group and the Henan government has lapsed and won’t be extended, AirAsia said in a filing late Thursday. The low-cost airline did not comment. The collapsed deal would mean China remains a crucial missing piece for AirAsia Group CEO Tony Fernandes, who has been expanding in the region with affiliates in Indonesia, Thailand, India, Japan and Vietnam to tap an aviation boom. The Malaysia-based company has ordered hundreds of planes worth billions of dollars from Airbus to meet its plans as the region’s expanding economies make air travel more affordable. The disclosure comes at a time Malaysia’s Prime Minister Mahathir Mohamad has been reviewing projects signed by his predecessor, risking Beijing’s displeasure. In July, his government suspended the East Coast Rail Link, which was being built by China Communications Construction Co. with an estimated price tag of $20b. <br/>