Zhengzhou set to host new low-cost airline

An aircraft is ready to take off in Zhengzhou Xinzheng International Airport. [Photo/VCG]

Zhengzhou, the capital of Central China's Henan province, will become the headquarters of a joint venture that runs a new low-cost carrier in a few years, official sources said.

AirAsia Berhad has signed a memorandum of understanding with China Everbright Group and Henan province to establish AirAsia (China), a joint venture to operate a new low-budget carrier in China, said Kathleen Tan, president of North Asia with AirAsia.

Zhengzhou is still short of budget airlines, and AirAsia's low-budget carrier will complement the city's transportation capabilities comprising the existing high-speed railway, highway and aviation, according to Tan.

"We chose Zhengzhou as our base due to its strategic location and its importance as a logistics hub. As China's gateway to Europe, Zhengzhou sits at the center of a vast rail, highway and air transport network that forms the linchpin of China's development plans for its central and western regions. With President Xi Jinping's vision for the Belt and Road Initiative, Zhengzhou is set to become even more important, not least as the heart of low-cost air travel in North Asia," said AirAsia Group CEO Tony Fernandes during the deal signing ceremony in May.

Tan said there are huge opportunities in China's low-cost aviation market.

Currently, budget airlines account for only 8 percent of Chinese aviation, while the figure in Southeast Asia is about 42 percent.

With the opening of China's airspace, low-cost aviation is expected to account for between 20 percent and 30 percent of China's aviation industry by 2030, and the sector will maintain an annual growth rate of 12 percent, said a report from CIConsulting.

The Chinese joint venture would be the final piece in AirAsia's expansion puzzle.

Since 2001, the group has built its presence in Malaysia, Thailand, Indonesia, the Philippines, India and Japan, with China closing the loop on all major territories in the Asia-Pacific region, said Fernandes.

Tan also noted that more digital-based services will be added by AirAsia to provide passengers with more tailor-made services and products.

Since the launch of its first flight to Chinese mainland in April 2005, AirAsia was the first international low-cost airlines operating in the Chinese mainland. To date, the Malaysia-based low-cost carrier is operating 448 flights to 19 Chinese cities, including Hong Kong, Macao and Taipei.