AirAsia has said that its plan to launch a low-cost carrier in Vietnam has been called off. The deal, which would have involved a tie-up with local carrier VietJet Aviation, failed to achieve regulatory approval in Vietnam, AirAsia said in a filing with the Malaysian stock market.
Malaysia-based AirAsia announced earlier this year that it had agreed to purchase a 30% stake in VietJet, with a view to launching the new LCC, which would have been named VietJet AirAsia. The airline currently operates units in Malaysia, Indonesia and Thailand, and plans to launch in Japan and the Philippines.
The Vietnamese domestic market is still dominated by state-run national carrier, Vietnam Airlines and its VASCO subsidiary, although Jetstar Pacific – the domestic Vietnamese subsidiary of the Qantas’ LCC – has been operating low-cost flights in the country since 2008, when it took over the former Pacific Airlines.