This article first appeared in The Edge Financial Daily on April 19, 2019

KUALA LUMPUR: AirAsia Group Bhd group chief executive officer (CEO) Tan Sri Tony Fernandes says he is optimistic about the low-cost carrier making another entry into the Vietnam market by the end of this year after the first attempt to form a joint venture (JV) there was called off.

“Vietnam is very much in the plan. I am still optimistic about AirAsia being in Vietnam by end of the year. Watch this space. Picking the right one,” he said on his Twitter account.

On Wednesday, AirAsia announced to Bursa Malaysia that it had terminated a JV plan with Vietnamese partners to set up a low-cost carrier in Vietnam, but gave no reason as to why it decided to do so.

AirAsia said its wholly-owned subsidiary AirAsia Investment Ltd (AAIL), Gumin Co Ltd and Hai Au Aviation Joint Stock Co (HAA) had amicably agreed to terminate and release each other from all obligations in relation to the proposed JV in Vietnam, effective immediately.

Nonetheless, AirAsia said the group remains interested in operating a low-cost airline in Vietnam due to its favourable geographical location, expanding aviation market and overall growth potential.

AirAsia previously announced in March 2017 that it would form a RM194 million low-cost airline JV in Vietnam, with the aim of offering an affordable but high-quality airline service to Vietnamese and foreign tourists.

At that time, AirAsia said AAIL would take up 30 million shares representing a 30% stake for RM58.2 million, while Gumin would hold 69.99 million shares or 69.9% in HAA, while Tran Trong Kien, the CEO of Thien Minh Travel Joint Stock Co, would hold one share.

In December last year, AirAsia reaffirmed its intention to set up the low-cost carrier JV in Vietnam, when it signed a memorandum of cooperation with Tran and HAA in Hanoi during the Vietnam Travel and Tourism Summit 2018.

AirAsia fell 2.02% or five sen to RM2.43 yesterday, with a market capitalisation of RM8.12 billion. In the past one year, the stock has retreated nearly 22%.