AirAsia's Fernandes looking at setting up airline in China — report

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KUALA LUMPUR (Nov 22): AirAsia Group Bhd chief executive officer and co-founder Tan Sri Tony Fernandes is eyeing to set up an airline in China in the longer term, according to Nikkei Asian Review.

In a report yesterday, Fernandes was quoted as saying that he views China as a foreign investment-friendly economy.

He said the market was already critical for AirAsia, with the group recording almost 20% of its annual sales from Chinese destinations.

"We have to make sure that we can be relevant in such a huge market," said Fernandes.

The news portal also revealed Fernandes was planning to launch an AirAsia Group affiliate in Cambodia, followed by China and Myanmar.

"I like Cambodia, China and Myanmar," Fernandes was quoted as saying in an interview.

After a third attempt to establish a Vietnam affiliate failed earlier this year, Fernandes said he had switched focus to other parts of the region.

"I don't have any plans in Vietnam for now after trying three times.

"We cannot find the right partner and now I think there are too many airlines there. ... Our time will come," he said.

Cambodian law does not restrict foreign ownership in the local airline industry, but new carriers are required to invest up to US$30 million in the country during the first three years, excluding aircraft.

The country's growing popularity as a tourist destination has already attracted several China-backed carriers, with six scheduled airlines now in the mix.

AirAsia Group currently has listed affiliate airlines in Indonesia and Thailand, with plans for a Philippine affiliate to go public next year.

"Sometimes it's easy to get a reliable partner but we must then make sure that the airport can take our growth and whether we can deliver a unique proposition to the market," Fernandes said.

"It's not always about the licence," he added.

In the longer term, his vision includes transforming AirAsia's online ticketing platform into a travel marketplace that would make the company the "Amazon of travel".

The first step along that path was to allow travellers to buy tickets on rival carriers through AirAsia.com.

Fernandes remains adamant that the new platform, powered by US online travel agency Kiwi.com, will not cannibalize AirAsia ticket sales.

"Even now, no one comes on AirAsia.com to straightaway purchase air tickets," Fernandes said. "They will definitely do some fare comparisons on some sites, and now I'm telling these people to do the comparison on our platform."

The next step will be to make hotel bookings and activities available on the same platform. Fernandes also intends to set up a separate Muslim-friendly online platform to tap into the vast global market for halal and Shariah-compliant tourism, Nikkei Asian Review reported.

It said the portal, to be known as "Ikhlas" — the Malay word for sincerity, will be launched "soon" and will include halal tours, hotels and restaurants worldwide.

At 10.49am, AirAsia shares gained 0.56% or 1 sen to RM1.79 for a market capitalisation of RM5.98 billion.