PETALING JAYA: The cancellation of the joint venture (JV) to form a low cost carrier in Vietnam will not negatively affect AirAsia Group Bhd’s expansion plan, said MIDF Research.
“While the cancellation of the JV may appear to negatively impact AirAsia’s expansion plan, we do not think that this is the case. In early April 2019, AirAsia introduced Can Tho to its network of routes with a weekly frequency of four flights. In fact, this is the first ever international flight to Can Tho, indicating AirAsia’s lead as an international airline for that destination,” it said in its report today.
It noted that Can Tho is AirAsia’s sixth destination in Vietnam while new services between Bangkok and Can Tho are set to commence in May 2019.
With 8.5 million visitors visiting the Mekong Delta in 2018, it opined that this destination has the potential to attract more visitors which will positively flow to AirAsia’s load factor thus, it is not imperative for AirAsia to set up a JV carrier in Vietnam.
Today, AirAsia told Bursa Malaysia that its wholly owned subsidiary AirAsia Investment Ltd, together with Gumin Company Ltd and Hai Au Aviation Joint Stock Company had amicably agreed to terminate and release each other from all obligations under the transaction agreements in relation to the proposed JV in Vietnam.
