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AirAsia gets aggressive in China market, signs JV to operate budget carrier

AirAsia Berhad has partnered with Everbright and Henan Government Working Group to establish a low-cost carrier (LCC) in China. AirAsia  said the parties had signed a memorandum of understanding (MOU) which outlines how it will establish a joint venture known as AirAsia (China), in operating a low-cost aviation business based in Zhengzhou, the capital of Henan province in central China.

In addition, AirAsia (China) will invest in aviation infrastructure, including a dedicated LCC terminal at Zhengzhou airport and an aviation academy to train pilots, crew and engineers, as well as maintenance, repair and overhaul (MRO) facilities to service aircraft.

Speaking at a private tri-lateral meeting with AirAsia and Everbright before the MOU exchange, Henan Provincial People’s Government deputy governor Shu Qing, who was not able to attend the ceremony, said, “With AirAsia supporting the city’s aeropolis – an industrial, commercial and logistics zone five times the size of Manhattan with the airport at its heart – we have absolute confidence that we will succeed in transforming Zhengzhou into the new hub for global transport and logistics.”

AirAsia Group CEO Tony Fernandes added that this Chinese joint venture represents its final piece of the AirAsia puzzle, “We chose Zhengzhou as our base due to its strategic location and importance as a logistics hub. As China’s gateway to Europe, Zhengzhou sits at the centre of a vast rail, highway and air transport network that forms the linchpin of China’s development plans for its central and western regions.”

“With President Xi Jinping’s vision for One Belt, One Road, Zhengzhou is set to become even more important, not least as the heart of low-cost air travel in North Asia,” he said.

“This is the latest in a long line of strategic collaborations with Chinese companies, from Tencent, Alipay and Union Pay for payments to ICBC for aircraft financing and CALC for aircraft leasing,” said AirAsia executive chairman Datuk Kamarudin Meranun.

In addition, Meranun said its working closely with Huawei to create a digital airline and smart airport to transform the way it flies and it also started exploring the COMAC C919: “China has been good to us and we want to give back in a big way, and this is just the start of enduring partnership that will benefit both China and Malaysia.”

Meanwhile, China Everbright’s Gao said, “We believe China is ready for the world’s leading LCC and we feel that AirAsia can deliver on that promise by providing real value to Chinese travellers thanks to its unique combination of low fares and world-class service.”

AirAsia was the first foreign LCC to enter China and has carried more than 40 million guests since its inaugural route to China in April 2005. AirAsia and AirAsia X currently fly to 15 destinations in China and is the largest foreign LCC operating into the country.

 

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