AirAsia signs with 3 parties to set up low-cost carrier in China

airasia-logoKUALA LUMPUR: AirAsia Bhd has signed a non-binding term sheet with China Everbright Group, Plato Capital Ltd and Oxley Capital Ltd to establish a joint venture for a low-cost airline in China.

In a filing to Bursa Malaysia today, AirAsia said the term sheet was valid for a period of no longer than 12 months from Sept 25, 2017 for the parties to discuss and negotiate definitive agreements for the proposed joint venture.

“The definitive agreements shall be subject to the approval of the audit committee and board of directors of the company.

“The term sheet is not legally binding, save for provisions relating to confidentiality, publicity and exclusivity,” it said.

Plato is an investment holding company, principally invested in the hospitality, education and precision engineering sectors, incorporated in Singapore and listed on the Singapore Exchange Securities Trading Ltd.

Oxley is an innovative private investment firm and multi-family office specialising in real estate, agriculture/alternative energy, natural resources sectors and investments across the Asia-Pacific region.

On May 14, 2017, AirAsia signed a memorandum of understanding (MoU) with China Everbright Group and Henan Government Working Group to establish a low-cost carrier (LCC) in China.

The MoU outlined the incorporation of a joint-venture to be known as AirAsia (China) to operate a low-cost aviation business based in Zhengzhou, the capital of Henan province.

Additionally, AirAsia (China) would also invest in aviation infrastructure, including a dedicated LCC terminal at Zhengzhou airport, an aviation academy to train pilots, crew and engineers, and maintenance, repair and overhaul facilities.