FARNBOROUGH: AirAsia remains keen on Singapore affiliate

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AirAsia remains keen on setting up an airline in Singapore, even though it is not one of the three countries where the Malaysia-headquartered airline group's next affiliate could be located.

"We have contributed tremendously to Singapore's economy, we have a night-stop aircraft there, and we are a truly Southeast Asian company now," says AirAsia group chief executive Tony Fernandes.

"I can understand why Singapore could be reluctant - they are worried that they have too many low-cost terminals. But if we get a license, we can develop new routes and increase the traffic into Singapore."

Fernandes is moving shortly from Malaysia to Indonesia where AirAsia has set up an Asean (Association of Southeast Asian Nations) office. This will allow him to develop a "regional strategy" for the group, which has airlines in Thailand, the Philippines, Indonesia and Malaysia, and one coming up in Japan.

But he admits that he has one eye on the growing competition on Indonesian low-cost carrier Lion Air, which has is the largest domestic budget airline in the country. Lion's executives could also be looking to follow the AirAsia model and set up affiliates around the region.

"Indonesia AirAsia is not performing the way we want it to, and I want to give it a bit more personal attention. If I don't, then Lion Air could grow and become more like us."