AIRASIA Group has failed to seal a deal with its China partners, delivering a blow to the low-cost carrier’s plans to tap into the world’s second-biggest aviation market, reported Bloomberg.
In a filing yesterday, the Malaysia-based airline said a preliminary agreement for a venture with China Everbright Group and the Henan provincial government, inked last year, had lapsed and would not be extended.
A request for comment sent to AirAsia today has yet to receive a response.
The failure to secure a deal means China remains a key market out of AirAsia’s reach. The company has ordered hundreds of aircraft from Airbus as part of its regional expansion plans, with affiliates in Indonesia, Thailand, India, Japan and Vietnam.
The deal’s collapse also comes at a time when Prime Minister Dr Mahathir Mohamad’s administration is reviewing several China-backed projects, including the East Coast Rail Link and two gas pipeline projects, that were entered into by the previous Barisan Nasional government led by Najib Razak.
AirAsia, Everbright and the Henan government signed a memorandum of understanding on May 14 last year to negotiate a definitive agreement. The MoU was valid for 12 months.
The airline’s plans included investing in aviation infrastructure, such as a dedicated low-cost carrier terminal at Zhengzhou airport, a pilot-training academy, and aircraft maintenance and repair facilities.
THE MALAYSIAN INSIGHT
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