News Backgrounder
AirAsia wins the region’s prize - AirAsia China
Malaysia’s AirAsia Group has built a stable of budget subsidiaries across the Asia-Pacific. Now it is set to put the icing on the no-frills cake with a joint venture carrier in China, an achievement that will take the group’s business to a new level.
June 1st 2017
Many airlines across the region have been avidly seeking a share of China’s fast growing air passenger market, but it was revealed in May that Malaysia’s AirAsia Group has pretty much beaten everyone to the punch with the surprise announcement that there will soon be an AirAsia China. Read More »
AirAsia Group CEO, Tony Fernandes, has signed a Memorandum of Understanding (MoU) with China Everbright Financial Holdings and the provincial government of Henan to establish budget carrier, AirAsia China, in the province’s capital of Zhengzhou.
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The new partners will invest in the development of a low-cost terminal at Xinzheng International Airport, an MRO facility and a training academy for airline crew.
“This Chinese venture represents the final piece of the AirAsia puzzle,” said Fernandes. “In just 16 years, we have successfully built a presence in Malaysia, Thailand, Indonesia, the Philippines, India and Japan, with China closing the loop on all major territories in the region.
“AirAsia can now live up to its name as the only airline that connects travellers across the Asia-Pacific – from China, Japan and South Korea in the north, Australia and New Zealand to the south, India and the Middle East to the west, and ASEAN at the centre.
“It represents an unbelievable foundation to drive growth for our partners and catapult change in the region.”
Why Zhengzhou? Built on the southern bank of the Yellow River, it is one of the Eight Great Ancient Capitals of China. More importantly, for a budget airline, it has a population of 9.3 million in a province of 95 million people.
In a report by The Economist Intelligence Unit on China, Zhengzhou was named as one of the 13 emerging megacities on the Mainland. Zhengzhou’s airport handles just over 20 million passengers annually and has forecast a sharp increase in passengers in coming years.
No details of the carrier’s launch date, fleet and aircraft type have been announced by the joint venture partners nor has the breakdown of the shareholding of each partner in the planned LCC been revealed.
The AirAsia Group has ordered 294 A20neo and 100 A321neo. Some of these aircraft could be earmarked for AirAsia China. In 2005, AirAsia became the first foreign LCC to fly into China. It has carried more than 40 million passengers on its flights to and from the Mainland. The budget carrier and a subsidiary, AirAsia X, fly to 15 destinations in China.
Fernandes, Everbright’s executive director and president, Wang Weifeng, and Henan Airport Group’s vice chairman and president, Li Weidong, signed the MoU in Zhengzhou in the presence of Malaysia’s prime minister, Najib Razak.
“We chose Zhengzhou as our base because of its strategic location and importance as a logistics hub. As China’s gateway to Europe, Zhengzhou sits at the centre of a vast rail, highway and air transport network that forms the lynchpin of China’s development plans for its central and western regions,” said Fernandes.
Henan government’s deputy governor, Shu Qing, said: “Zhengzhou was once the capital of ancient China; with AirAsia supporting the city’s aeropolis – an industrial, commercial and logistics zone five times the size of Manhattan with the airport at its heart – we have absolute confidence we will succeed in transforming Zhengzhou into the new hub for global transport and logistics.”
China Everbright Group vice chairman and president, Gao Yunlong, said China “is ready for the world’s leading LCC. We feel AirAsia can deliver on that promise by providing real value to Chinese travellers thanks to its unique combination of low fares and world-class service.”
AirAsia co-founder and executive chairman, Datuk Kamarudin Meranun, said the MoU was the latest in a long line of strategic collaborations with Chinese companies, from Tencent, Alipay and Union Pay to ICBC for aircraft financing and CALC for aircraft leasing.
“We are working closely with Huawei to create a digital airline and a smart airport to transform the way we fly. We also have started exploring the COMAC C919. China has been good to us. We want to give back in a big way,” he said.
