This is part of AirAsia’s plan to expand its presence in the Southeast Asian market, targeting Singapore and Vietnam, while taking advantage of the increasing demand for budget airlines.
AirAsia wants to establish its presence in Singapore and Vietnam, although they admit it will be difficult to become a major player in these markets, according to Edge quoting Tony Fernandes, CEO of the parent company, AirAsia, Capital A Bhd.
BNN Breaking believes that AirAsia is targeting Singapore and Vietnam because these are two countries with a large number of passengers and busy airports.
CEO Tony Fernandes openly acknowledges the barriers to entering highly competitive markets, but remains optimistic about the growth potential in these markets. This move demonstrates AirAsia’s aggressive growth strategy, aiming to expand into new regions and diversify its operations beyond Southeast Asia.
AirAsia currently operates in Malaysia, the Philippines, Indonesia, Thailand, and Cambodia.
4 failed attempts
AirAsia’s desire to enter the S-shaped country is not new. They had previously planned to establish a low-cost joint venture airline in Vietnam, but all attempts had failed.
First, AirAsia participated in the race to become a strategic shareholder of Pacific Airlines. However, the victory went to Australia’s Qantas Group.
Second, in 2007, AirAsia formed a 30% joint venture with Vietnam Shipbuilding Industry Group (Vinashin) to establish an airline, but the Vietnamese government did not approve the establishment of a new airline, especially one with foreign investment.
Third, AirAsia wanted to cooperate with Vietjet Air to establish an airline, but due to the lack of preparation for operations, their license was revoked at the end of 2010.
The most recent attempt occurred in April 2019 when AirAsia failed to establish a joint venture with Thien Minh Group.
Vu Hao (Source: BNN Breaking, Bloomberg)
