Posted on: 16 December 2010 by Ross McSweeny
AirAsia has announced that the company, through its wholly-owned subsidiary AA International Ltd, has entered into a partnership agreement with Antonio Cojuangco Jr, Michael Romero and Marianne Hontiveros to establish a low-fare airline in the Philippines based on the AirAsia business model.
AirAsia will hold 40% equity in AirAsia Inc (the company incorporated for the joint venture) through AirAsia International, while the remaining 60% will be held in equal partnership by Cojuangco, Romero and Hontiveros.
AirAsia Inc will build on AirAsia’s strength to forge into markets in China, Korea and Japan from the Philippines and also tap into existing prime markets such as Singapore, Hong Kong and Taiwan. These sectors will enhance AirAsia’s ASEAN regional expansion by providing AirAsia with additional routes and destinations and linking the destinations with AirAsia’s already comprehensive route network
In announcing the JV, AirAsia Group CEO Tony Fernandes noted, “We are proud to extend AirAsia’s successful low-cost business model to the Philippines and make it affordable for the average Filipino to travel domestically and regionally. The airline will also offer greater access to affordable travel to the Philippines which will help the economic growth of the country as evident in other regions AirAsia is currently serving.”
Speaking on behalf of the Filipino shareholders, Marianne Hontiveros said the setting up of AirAsia Philippines will create healthy business competition and make air travel more affordable for Filipinos.
“The establishment of AirAsia Philippines will benefit various industries such as travel and tourism, hospitality, entertainment and retail. It will also help the Philippines achieve its Millennium Development goals by 2015,” concluded Hontiveros.
As part of the JV, AirAsia will provide technical, operational and commercial support on an arms-length basis to AirAsia Inc to ensure commercial, operational, branding and service level uniformity throughout AirAsia’s operations.
The joint venture is expected to begin operations in the third quarter of 2011 subject to obtaining the relevant approvals.