Air Transport

Malaysian low-cost carrier AirAsia is seeking to set up a new airline in Vietnam in partnership with shipbuilding company Vinashin.

In a Malaysian stock exchange announcement AirAsia says has signed a letter of intent with the Vietnam Shipbuilding Industry Corp “as a preliminary step towards exploring, assisting and creating a business co-operation between both parties regarding the establishment of a low-cost airline based on the AirAsia business model in Vietnam”.

It says the new airline will be named Vina AirAsia and it will operate on domestic and international routes. It adds that the new airline will eventually build two distinct divisions to facilitate short-haul and long-haul aviation. “The new airline will be built on the successful low-cost model pioneered by AirAsia in this region,” it says.

Vinashin, Vietnam’s national shipbuilding group, will primarily be responsible for securing government approvals for the establishment of the new airline while AirAsia will procure aircraft, provide management expertise and set up the main airline infrastructure.

AirAsia already has 49% owned low-cost associate carriers in Indonesia and Thailand that operate both domestic and short-haul international services. The main Malaysian operation also operates domestic and short-haul services while a sister carrier is being established that will operate long-haul services.

There are currently two main airlines operating in Vietnam, both of them controlled by the state. National carrier Vietnam Airlines is a full-service operator while Pacific Airlines is a low-cost carrier which recently became 18% owned by Australia’s Qantas.

Vietnam’s Government late last year announced that it planned to ease ownership restrictions to allow foreign groups to control up to 49% of local carriers, although it was expected that the new rules would continue to cap at 30% the shareholding a single foreign group could have.