HANOI – Budget airlines VietJet Air and AirAsia have sealed a strategic partnership and plan to launch a new Vietnam-based budget airline despite protests from national carrier, Vietnam Airlines.
The new airline will be called VietJet AirAsia, although the routes to be served have not been confirmed.
“This should be viewed as a very positive development for Vietnam tourism and the people of Vietnam,” said AirAsia chief executive Tony Fernandes.
Malaysian Prime Minister Abdullah Badawi and Vietnamese Deputy Prime Minister Truong Vinh Trong attended the signing at the Sheraton Hanoi Hotel.
VietJet Air is a private airline.
In February, Vietnam Airlines officially objected to AirAsia’s acquisition of a 30 percent stake in VietJet Air, claiming foreign airlines were not allowed to operate domestic flights within Vietnam.
Deputy Minister of Transport Pham Quy Tieu said the partnership complies with Vietnamese laws, the Vietnam News reported at the time.
Fernandes insisted that the new company will not compete with Vietnam Airlines. Whereas Vietnam Airlines is a full-service airline, he said, VietJet AirAsia will cater to budget travellers.
Foreign companies can hold up to 30 per cent of Vietnamese airlines. Jetstar Pacific, another private Vietnamese company, is 27 percent owned by Qantas.
Jetstar has also been the target of complaints by Vietnam Airlines, which observers attribute to the national carrier’s efforts to suppress the competition.
