KUALA LUMPUR (Oct 1): There is "massive potential" in the coming years for the airline industry in China where the AirAsia Group is now flying its passengers to 17 cities, said founder and group chief executive officer Tan Sri Tony Fernandes.

"With only some 8.7% or 120 million Chinese [nationals] actually holding passports, there is massive potential for the airline industry in the coming years," said Fernandes in a LinkedIn post today.

"And the stars are aligning with passport application procedures being simplified along with the intensified efforts towards further internationalisation in various industries," he added.

His statement came after AirAsia announced on Aug 30 that it was dropping a proposed joint venture with state-linked China Everbright Group and the Henan government to build a low-cost carrier terminal (LCCT) in Zhengzhou in the Henan province.

AirAsia group chairman Datuk Kamarudin Meranun later, on Sept 3, said there were “various reasons”  behind AirAsia not renewing the preliminary agreement signed last year with the two parties, including failure to secure an existing domestic operating license.

The no-go on the JV also meant AirAsia would still not be able to offer domestic flights in China — though Kamaruddin assured that AirAsia is still “a significant player” in the Chinese market and “will continue to remain so”.

Meanwhile, Fernandes noted in his LinkedIn post that the airline industry in the world’s second largest economy has changed from when AirAsia first entered the market some 15 years ago — although still largely underserved.

"My dream is to consistently explore new areas of growth particularly in secondary and tertiary cities while facilitating trade in these routes less travelled by providing connection, just like what we did for the likes of Bandung, Phuket, Jaipur; destinations where no one [knew] nothing about initially but are now well known tourism darlings," he said.

AirAsia, he said, now has a commanding mix for Chinese tourism growth, thanks to its growing network and the "fly-thru connectivity".

"I strongly believe in tourism and trade as a complementary unit: one drives the development of the other and local economies benefit from the tourism multiplier effects that consist of job creations, new businesses and so much more," said Fernandes.

"There has always been a lack of connection between smaller cities in China and India, but with our extensive fly-thru network, both markets are now more connected than before," he said,

Connectivity, he said, is "the secret recipe for unimpeded trade", and this connectivity will be further enhanced by the group's new logistics arm, the RedBox Logistics, which he envisions "will take businesses to new heights".