Low cost airline group AirAsia is spreading its wings again with plans to establish another regional affiliate in Asia.
The Malaysia based LCC will start a Vietnamese carrier in partnership with Gumin Co, businessman Tran Trong Kien and Hai Au Aviation Joint Stock Co.
The JV will be established with an initial investment of $43 million.
Gumin Co and Kien will hold about 70% of equity in the new venture with AirAsia owning the remainder.
AirAsia says it aims to start operations by early 2018.
"There is great potential for growth in Vietnam. This clearly presents an opportunity for another low cast carrier to enter into the market," AirAsia said.
"AirAsia has conducted a feasibility study prior to entering into the JV and, based on the study, it is forecasted that the JV will be operationally feasible and commercially viable and is expected to contribute positively to AirAsia’s financials both directly and indirectly in the future," it said in a filing to the Bursa Malaysia stock exchange.
While the Vietnam market is among the fastest growing in Southeast Asia, it is currently dominated by budget carrier Vietjet which has about 45% share of the market.
