AirAsia Group has reaffirmed its plans to establish a subsidiary in Vietnam following the signing of a Memorandum of Cooperation on Thursday, December 6.

A Bursa Malaysia announcement said the low-cost carrier group still intends to partner Thien Minh Travel Joint Stock Company (TMG) and Hai Au Aviation Joint Stock Company (HAA) in the launch of AirAsia Vietnam (Hanoi) despite delays in the regulatory approval process.

Under an existing shareholders agreement, AirAsia Group would gain a 30% stake in Hai Au Aviation whose share capital would then be grown to VND1 trillion (USD43.95 million). The Malaysians would pay VND300 billion dong (USD12.86 million) for their foothold and would then use Hai Au Aviation, an existing seaplane operator, to gain access to the Vietnamese market thus circumventing a long queue of prospective entrants that include Vietstar Airlines (Ho Chi Minh City) and SkyViet Aviation (0V, Ho Chi Minh City).

Vietnamese authorities have been unwilling to approve the entry of any new start-ups in the country's largescale commercial aviation market until all relevant airport infrastructure in key cities such as Hanoi and Ho Chi Minh City has been upgraded.