The Vietnam partner of AirAsia Group Bhd expects their new carrier to begin operations in August, joining the ranks of low-cost airlines in Southeast Asia as a growing middle class spurs many to travel by air.

Tony Fernandes – CEO of AirAsia has never given up the idea of conquering Vietnam, a potential market with 100 million people although the previous cooperation with Vietjet was not successful. “AirAsia must come to Vietnam if it wants to be an Asean airline”, he said.

The new airline would become the latest entrant following Bamboo Airways this year in Vietnam, a market dominated by state-owned Vietnam Airlines and private budget carrier Vietjet.

Vietnamese Prime Minister Nguyen Xuan Phuc expressed support for the venture during a Dec. 6 meeting with Tony Fernandes and Tran Trong Kien – Thien Minh Group CEO. The airline plans to deploy five or six Airbus SE A320 and A321 aircraft on domestic routes between Hanoi, Da Nang and other cities as well as for regional flights, and the fleet could expand to as many as 30 within three years, Kien said in an interview on Dec. 7.

Under an agreement signed in March last year, AirAsia will hold a 30 percent stake in Hai Au Aviation with Gumin Co., headed by Kien, controlling about 70 percent, the Vietnamese businessman said. The airline targets to have a market share of 20 percent to 30 percent within a decade, he said.

During the next months, AirAsia and Thien Minh Group will use all resources at their disposal to accelerate the joint venture project. It is believed that this new LCC will significantly benefit the Vietnam economy and make air travel more accessible to almost 100 million citizens of this S-shaped country.

In addition, the leaders of Thien Minh Group and AirAsia also express their interest in investing in the airports in Vietnam’s central region such as Chu Lai and Phu Bai with the aim of developing and transforming these airports into international low-cost terminals in the region.

Source: Soha and Bloomberg