China Everbright Group, the Henan Working Group and AirAsia Berhad have announced the signing of a Memorandum of Understanding to establish a low-cost carrier in China as a joint venture.

AirAsia China (Zhengzhou) will be based in Zhengzhou, the capital of Henan province, where the new low-cost carrier also plans to build a dedicated low-cost carrier terminal, an aviation training academy and a MRO facility.

AirAsia Group CEO Tony Fernandes said, “We chose Zhengzhou as our base due to its strategic location and importance as a logistics hub. As China’s gateway to Europe, Zhengzhou sits at the centre of a vast rail, highway and air transport network that forms the linchpin of China’s development plans for its central and western regions. With President Xi Jinping’s vision for One Belt, One Road, Zhengzhou is set to become even more important, not least as the heart of low-cost air travel in North Asia."

China Everbright Group is a conglomerate focused on financial services and controlled by the state-owned Assets Supervision and Administration Commission of the State Council. Henan Working Group represents the Henan state government.

AirAsia already operates joint ventures in India, Indonesia, the Philippines and Thailand and is about to relaunch its activities in Japan. It also has recently announced plans for a JV in Vietnam.

AirAsia Group already serves 15 destinations in China, but does not yet operate from/to Zhengzhou, where China Southern Airlines (CZ, Guangzhou) is the dominant carrier today controlling approximately 23% of weekly capacity according to the ch-aviation capacity module.