AirAsia wants out of Vietjet

Malaysian low-cost airline AirAsia plans to divest from local private carrier Vietjet Air after the two partners in the joint-venture have not reached an agreement on the JV’s brand name.

The VnExpress online newspaper has quoted a VietJet Air source as saying AirAsia has suggested that it withdraw from the joint venture. The two sides were still seeking a solution for the issue, the source said.

“AirAsia remains one of our shareholders,” said the source. “If the negotiation comes to a standstill and our partner maintains its decision to divest its stake, we will try our best to overcome difficulties so that we can take off this year.”

AirAsia announced its purchase of a 30 per cent stake in Vietjet in February 2010, aiming to become the sole foreign partner of VietJet Air, the first private airline licensed in Viet Nam.

The two partners planned to launch domestic and overseas flights late last year under the name VietJet AirAsia.

But no flight operated by the joint venture carrier has taken off. The Civil Aviation Authority of Viet Nam (CAAV) has banned local carriers from using brands and logos of foreign airlines for their services.

The same situation has faced Jetstar Pacific. On 2 November 2009, the Ministry of Transport decided that Jetstar Pacific must have a new logo to replace the “Jet” logo and orange star to avoid confusion.

Vietjet Air, which was licensed in December 2007 with a registered capital of VND600 billion ($28.6 million), has repeatedly postponed their flights due to difficulties in the aviation market.

The carrier is estimated to have spent VND100 billion ($4.7 million) to maintain its operations over the past three years without operating any flights.

Tags: AirAsia, VietJet