PETALING JAYA: AirAsia Group Bhd has scrapped its joint venture (JV) plan to set up a low-cost carrier (LCC) n Vietnam with local partners.
The group 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 joint venture in Vietnam, effective April 17, 2019.
Despite the termination, AirAsia stressed that it remains interested in operating a low-cost airline in Vietnam due to its favourable geographical location, expanding aviation market and overall growth potential.
“The termination of the joint venture is not subject to the approval of the company’s shareholders and is not expected to have any financial impact on the net assets or gearing of the company.”
AirAsia first announced its intention to establish an LCC in March 2017 and a memorandum of cooperation was signed in December 2018.
AirAsia Group CEO Tan Sri Tony Fernandes had said Vietnam is one of the last remaining countries with a large population within the region that AirAsia is not in.
AirAsia is already the largest foreign airline group in Vietnam by capacity, currently operating to five destinations in the country, including its latest addition of Phu Quoc.
Its shares gained 1 sen or 0.4% to close at RM2.48 today with 8.08 million shares changing hands.