AirAsia is buying 30% of Vietnamese start-up VietJet, which means the Malaysian low-cost carrier appears to have finally succeeded in its long-held ambition to enter the Vietnamese market.
"The ministry of transportation of Vietnam approved the [30%] share acquisition on 9 February", says AirAsia.
The Vietnamese start-up will be positioned as a low-cost carrier and will be branded VietJet AirAsia and tap AirAsia's expertise to market low-cost flights, it says.
"VietJet is finalising details regarding routes, frequencies and launch of flights," says AirAsia, adding that the Vietnamese joint-venture will operate domestically and internationally.
VietJet has been trying to launch for at least two years but has kept delaying, citing the downturn in the aviation market.
In 2008 it signed a letter-of-intent with GE Commercial Aviation Services for two Boeing 737-700s but later cancelled the deal.
AirAsia, meanwhile, has been trying for years to enter the Vietnamese market in an effort to fulfil the ambitions of AirAsia's founder Tony Fernandes who wants the carrier to be in every major ASEAN market. Besides Malaysia, it already has airlines in Indonesia and Thailand.
In 2007, AirAsia announced it would be establishing an airline in Vietnam in partnership with the country's national shipbuilding company Vinashin.
It held a high-profile press event in which Vietnam's prime minister was present. Any new airline in Vietnam needs prime ministerial approval.
But AirAsia's joint-venture with Vinashin failed to get approval as the government tried to limit the number of air operator certificates issued. This was to protect Vietnam Airlines and, to a lesser extent, Qantas Airways' Vietnamese joint-venture Jetstar Pacific.