After Vietnam, AirAsia Will Launch a Low-cost Carrier in China

AirAsia Bhd signed a joint venture agreement with China on Sunday to establish a low cost carrier (LCC), with a base in the east-central city of Zhengzhou. The city is the capital of the Province of Henan, famous for its Shaolin monastery and Pagoda Forest. It has a fast growing population and development with total population reaching over six million inhabitants and is known in China as the manufacturing place for busses. Greater Zhengzhou was named as one of the 13 emerging megacities or megalopolises in China in a July 2012 report by the Economist Intelligence Unit.

AirAsia (China) is a joint venture between AirAsia, Everbright Group and Henan Government Working Group, the airline said in a statement.

AirAsia (China) will also 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, the statement said.

Malaysian Prime Minister Najib Razak, who is on a visit to China, witnessed the signing of the joint venture agreement.

“This Chinese venture represents the final piece of the AirAsia puzzle,” said AirAsia Group CEO Tan Sri Tony Fernandes. In just 16 years, we have successfully built a presence in Malaysia, Thailand, Indonesia, Philippines, India and Japan, with China closing the loop on all major territories in Asia Pacific.”

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Pagoda Forest near Zhengzhou

AirAsia and AirAsia X currently fly to 15 destinations in China and the group is the largest foreign LCC operating into the country.

Destinations in Mainland China include Beijing, Changsha, Chengdu, Chongqing, Guangzhou, Guilin, Hangzhou, Kunming, Nanchang, Nanning, Shanghai, Shantou, Shenzhen, Wuhan, Xian as well as Hong Kong and Macau. Kuala Lumpur has the largest network with flights to 13 destinations in China PRC followed by Bangkok with 12 Mainland destinations. Destinations such as Chiang Mai, Kota Kinabalu, Pattaya, Penang, Pattaya and Phuket are also linked by many routes to China.

AirAsia is Asia’s largest budget airline. China’s Everbright Group is a state-backed financial firm.

(Source: Reuters)