AirAsia to launch China joint venture

Budget airline AirAsia has signed a joint venture agreement to set up a new low-cost carrier in China.

It wants to tap in to demand in the country, which is set to overtake the US to become the world's biggest aviation market within the next decade.

Based in the central eastern city of Zhengzhou, the airline will be run in partnership with the Everbright Group.

AirAsia already has operations in Malaysia, Thailand, Indonesia, Japan, Philippines and India.

"This Chinese venture represents the final piece of the AirAsia puzzle," said chief executive Tony Fernandes, adding it "closes the loop" in the region.

Once for the privileged few, flying domestically within China has boomed. Civil Aviation Administration of China figures suggest that in 1982 there were fewer than four million air passenger journeys within the country. By 2016, that number had reached 487 million.

'Give back'

Will AirAsia end up buying some of the China-made Comac C919s when they come onto the market?

AirAsia said that as well as running the airline, it would invest in aviation infrastructure and set up an academy to train pilots, crew and engineers.

There would also be new facilities to service and maintain aircraft in Zhengzhou, the capital of Henan province.

AirAsia already has a presence in China, flying to 15 destinations there, making it the country's largest foreign budget airline.

"China has been good to us and we want to give back in a big way, and this is just the start of an enduring partnership that will benefit both China and Malaysia," said AirAsia executive chairman Kamarudin Meranun.

He added the airline had "started exploring" the prospect of eventually buying Chinese-made Comac C919 planes which are currently in development.