This article first appeared in The Edge Financial Daily on December 7, 2018

KUALA LUMPUR: AirAsia Group Bhd has reaffirmed its intention to set up a joint-venture (JV) low-cost carrier in Vietnam by signing a memorandum of cooperation (MoC) with a Vietnamese partner yesterday.

The MoC was signed by AirAsia group chief executive officer (CEO) Tan Sri Tony Fernandes and Vietnamese businessman Tran Trong Kien, in his capacity as CEO of Thien Minh Travel Joint Stock Co and general director of Hai Au Aviation Joint Stock Co. The signing, conducted on the sidelines of the Vietnam Travel and Tourism Summit 2018 in Hanoi, was witnessed by Vietnamese Deputy Prime Minister Vu Duc Dam, AirAsia said in a statement.

“AirAsia is an Asean airline,” said Fernandes. “And in Asean, Vietnam is one of the last remaining countries with a large population we’re not in. Last year, when we announced this JV, we were bullish about Vietnam, and we remain incredibly bullish about serving one of the most dynamic, fastest-growing economies in Asia.”

The statement did not mention the size of the stake AirAsia will have in the JV, but Vietnam’s laws only allow up to 30% foreign ownership in airlines.

Tran said the JV was a “much needed and welcome move” as it will “bring more and better choices to our people in the years to come”.

Fernandes said AirAsia currently is the largest foreign airline group in Vietnam by capacity. It operates 141 return flights weekly on 13 routes, connecting Hanoi, Ho Chi Minh City, Da Nang, Nha Trang and Phu Quoc with Kuala Lumpur, Penang and Johor Baru in Malaysia, Bangkok and Chiang Mai in Thailand, and Manila in the Philippines, and has carried 12 million passengers to and from Vietnam since entering the market in 2005.

AirAsia shares closed five sen or 1.61% lower at RM3.06 yesterday with a market capitalisation of RM10.23 billion.