ASEAN KEY DESTINATIONS
Air Asia Philippines starts in 2011
After setting up joint ventures in Thailand, Indonesia, and Vietnam, Southeast Asia's biggest budget carrier Air Asia is now launching Air Asia Philippines.
With a capital of US$25 million, the joint venture promises to offer the lowest fares compared with its local rivals budget carrier Cebu Pacific and flag-carrier Philippine Airlines.
Air Asia group CEO Tony Fernandes said: "We do expect it to be profitable right away.
"Many of the routes that Air Asia Philippines will be going to are already being exploited by other Air Asia companies so the set up cost for Air Asia Philippines is very low. So we can hit the ground running very fast".
The joint venture is expected to commence operations in August next year, with Air Asia holding a 40 per cent stake in the new company.
Fernandes said he believes Air Asia Philippines will contribute tremendously in enhancing the airline's regional expansion.
He said only a small fraction of the Philippines' 90 million people are currently making use of air travel, adding that he believes there's a huge potential in the country.
"We think that the market in Philippines is very small compared to what it should be. And hence we believe that Air Asia Philippines could be a very large airline in the not too distant future," he said.
Air Asia Philippines' Filipino investors is led by Antonio Cojuangco, a cousin of Philippine president Benigno Aquino, who promises to adopt an open skies policy and liberalise the country's aviation industry.
"We started coming to the Philippines with the last government," Fernandes said.
"But this administration gives us a lot of confidence to go forward. They are approachable and they have a lot of good technocrats.
"They are very pro-business and pro-people. They want to make sure that the Philippines catches up with the rest of Southeast Asia, and we can help with that aspect."
Fernandes also announced that Air Asia is now giving priority to the Philippine joint venture before proceeding with joint venture plans in Vietnam.
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