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AirAsia calls off talks to launch airline in Myanmar

2018.05.18 09:43:29
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Shares in AirAsia Group fall as much as 10 percent on May 14 in the first trading session since Mr Fernandes’ public apology. [Photo EPA]

Shares in AirAsia Group fall as much as 10 percent on May 14 in the first trading session since Mr Fernandes’ public apology. [Photo EPA]

Talks between Malaysia-based AirAsia Bhd and a partner to open a budget airline in Myanmar have come to a halt. AirAsia’s chief said that the airline has decided “not to go into Myanmar just yet”.

The latest development comes after less than two months when AirAsia revealed it was in talks with a potential partner to start an airline serving the country. Had the venture been successful, the move would have enabled the budget carrier to cover up to 95 percent of the Southeast Asia aviation market.

AirAsia CEO Tony Fernandes told Reuters in March that he had met with a potential “well-respected” partner with a “good airline” in Sydney and was undergoing the necessary processes towards forming the new airline. He added that the airline would not be a big one due to the current airport infrastructure, but said Myanmar’s large population promises further potential for growth over time. AirAsia did not disclose who the potential partner is and which airline that person owns.

According to Reuters, Mr Fernandes told reporters at an AirAsia event in Bangkok, “The negotiations have stopped. We are not moving ahead with Myanmar at the moment… We might revisit that but we’ve decided not to go into Myanmar just yet.”

The airline is heading into what many see as a stormy period.

On May 13, the AirAsia chief publicly apologised for having appeared to back former Malaysian leader Najib Razak and Barisan Nasional (BN) in the run-up to the General Election, saying that he had “buckled” under pressure from the previous administration. Najib Razak lost the election to veteran politician Mahathir Mohamad, 92.

Before the votes, Mr Fernandes had appeared in a video on Youtube, crediting the government for AirAsia’s success. He also painted his planes in BN colours. In addition, Najib Razak posted pictures of himself boarding an AirAsia aircraft from Kota Kinabalu to Kuala Lumpur, with the plane sported the livery “Hebatkan Negaraku” (Make My Country Greater), which was BN’s campaign slogan.

Shares in AirAsia Group fell as much as 10 percent on May 14 in the first trading session since Mr Fernandes’ public apology.

The Malaysian low-cost airline currently has businesses in Malaysia - its home - along with India, Indonesia, the Philippines, Japan and Thailand, as well as plans to launch an airline in China. Mr Fernandes said he also expected AirAsia’s Vietnam joint venture to be flying by October or early next year.

By The Myanmar Times(Published: 17/05/2018)

https://www.mmtimes.com/news/airasia-calls-talks-launch-airline-myanmar.html

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]

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