News
AirAsia China MoU has “lapsed”
September 7th 2018
Malaysia’s AirAsia Group has ceased negotiations with potential joint venture partners in China and has said the launch of AirAsia China would not go ahead as announced in May 2017. Read More »
In a filing with the Malaysian Stock Exchange, the LCC conglomerate said the Memorandum of Understanding (MoU) signed in 2017 with China Everbright Group and the Henan Government Working Group “has now lapsed and will not be extended”. Under the MoU, the parties had twelve months “to discuss and negotiate definitive agreements for the JV”, it said.
In addition to setting up the LCC, the three parties had agreed the AirAsia China joint venture would 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 had chosen 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 would grow in importance as China's 'One Belt, One Road' policy became 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.
AirAsia China is not the first AirAsia venture that has been called off this year. In May, AirAsia Group ceased talks with potential joint venture partners in Myanmar. “We are not moving ahead with Myanmar at the moment. We might revisit that, but we’ve decided not to go into Myanmar just yet,” Fernandes was quoted by Reuters then.
The AirAsia Group has subsidiaries in Malaysia, Thailand, Indonesia, India and Japan. Following the cancellation of AirAsia China and AirAsia Myanmar, new AirAsia subsidiaries in Cambodia and Vietnam remain in the pipeline.
