Asia Business Channel

Air Asia to become Vietnam’s sixth active airline

Malaysia-based AirAsia, Asia’ largest budget airline, and Vietnamese firm Hai Au Aviation have agreed to start Vietnam’s sixth airline and plan to start operations in 2019. A memorandum of understanding to create the new airline was signed by AirAsia Group CEO Tony Fernandes and Vietnamese businessman Tran Trong Kien, CEO of Hai Au Aviation.

Air Asia and Hai Au Aviation will invest in construction, infrastructure and development of human resources to establish a low-cost airline that will utilize Air Asia's business model.

AirAsia is the biggest budget carrier in Southeast Asia and is headquartered in Kuala Lumpur, Malaysia. It has established branches in India, Indonesia, Japan and Thailand and Vietnam will be a key country in the airlines network. With more than 93 million citizens Vietnam represents a key outbound market that compliments its international tourism inbound arrivals. In April 2017, AirAsia Investment signed an agreement with Hai Au Aviation, Gumin Co. Ltd and businessman Tran Trong Kien to set up a joint venture in Vietnam to establish the new airline. The venture envisaged an investment of $44 million USD, with AirAsia investing 30% and Hai Au Aviation and Gumin investing 70%. The Hai Au Aviation Joint Stock Company, established in 2011, is a subsidiary of Thien Minh Group (TMG), one of Vietnam's leading travel and hospitality companies.

AirAsia2
AirAsia planes at Kuala Lumpur International Airport, Malaysia

The new airline will be the sixth Vietnamese carrier. Other airlines include Vietnam Airlines, Vietjet Air, Jetstar Pacific, VASCO and Bamboo Airways. Vietnam received 14.12 million foreigners in the first 11 months of 2018, a 21.3% year-on-year increase that exceeds the 12.9 million international tourists who visited the country in 2017. More than 80% of foreign tourists come to Vietnam by air so the new Air Asia / Hai Au airline will help Vietnam tourism expand.

AirAsia currently operates 13 routes with 141 flights weekly - including six unique routes that connect Hanoi, Ho Chi Minh City, Da Nang, Nha Trang and Phu Quoc with Kuala Lumpur, Penang and Johor Bharu (Malaysia), Bangkok and Chiang Mai (Thailand) and Manila (Philippines). Since entering Vietnam in 2005, the airline has carried more than 12 million passengers to and from the country.

Tran Trong Kien, CEO of Hai Au Aviation said at the signing ceremony that: "Vietnam tourism has performed extremely well. The number of international arrivals has doubled over the last three years and domestic and outbound travel have also grown tremendously."

Read 35