News
AirAsia adds two Singapore partners to AirAsia China venture
September 29th 2017
AirAsia Group’s planned China joint venture, AirAsia China, has two new partners, Singapore’s Plato Capital and Oxley Capital. Read More »
The two investment firms will join Malaysia’s AirAsia Group and China's state-owned Everbright Financial Investment Holdings in setting up the new Zhengzhou-based low-cost carrier.
The parties entered into a non-binding term sheet last Friday, valid for a year, the AirAsia Group confirmed on Monday.
On May 14, AirAsia announced its intention to set up AirAsia China in a Memorandum of Understanding with Everbright and the Henan Government Working Group. If materialized, AirAsia China would be first foreign low-cost carrier to enter China.
“With rapid liberalisation and the gradual easing of travel restrictions, China's aviation market is experiencing remarkable growth. China ranks second after the U.S. in the air travel passenger market and will overtake the U.S. by 2024,” Plato said in an exchange filing.
In addition to setting up the LCC, the AirAsia China joint venture will invest in a dedicated low-cost terminal at Zhengzhou Airport, a MRO facility and an aviation academy to train pilots, engineers and cabin crew.
AirAsia Group CEO, Tony Fernandes, said AirAsia and its partners chose Zhengzhou for the new carrier because of the city’s strategic location in central/eastern China and its large catchment area. The AirAsia China investors believed Zhengzhou will grow in importance as China's 'One Belt, One Road' policy becomes a physical fact. Zhengzhou is one of China’s key logistical hubs, with many of the world’s largest cargo airlines offering scheduled services into Zhengzhou.
Cargolux is in the process of establishing a Chinese subsidiary in Zhengzhou, Cargolux China.
AirAsia Group’s Fernandes said AirAsia China represented “the final piece of the AirAsia puzzle, closing the loop" on all major territories in the Asia-Pacific.
