Malaysia-based low-cost carrier AirAsia will set up a new joint venture carrier in the Philippines, which will begin operations in the third quarter of 2011.
It will hold a 40% stake in the carrier through its wholly-owned subsidiary AirAsia International, says the carrier. Philippine investors Antonio O. Cojuangco Jr, Michael R. Romero and Marianne B. Hontiveros will own the remaining 60%, with each individual holding a 20% stake.
The new airline will focus on markets in China, South Korea and Japan, says AirAsia. It will also concentrate on "existing prime markets" like Singapore, Hong Kong and Taiwan.
"These sectors will enhance AirAsia's ASEAN regional expansion by providing AirAsia with additional routes and destinations and linking the destinations with AirAsia's already comprehensive route network," adds the airline.
AirAsia Philippines will begin flights in the third quarter of 2011, subject to it gaining the necessary regulatory approvals.
An AirAsia spokeswoman says it is not clear yet how many aircraft will be based in the Philippines. The airline group operates a mostly Airbus A320 fleet.
AirAsia says it will provide "technical, operational and commercial support on an arm's length basis" to the joint venture to ensure uniformity throughout the airline group.
"We are proud to extend AirAsia's successful low-cost business model to the Philippines and make it affordable for the average Filipino to travel domestically and regionally. The low cost airline will also offer greater access to affordable travel to the Philippines which will help the economic growth of the country," says AirAsia's group CEO Tony Fernandes.
AirAsia already operates flights to Manila's Clark Airport from Kuala Lumpur and Kota Kinabalu. Its new joint venture in the Philippines will compete against other low-cost carriers in the country like Cebu Pacific, Airphil Express and Zest Airways.