AirAsia Group has moved forward with plans to establish an LCC in Vietnam by signing an MOU with a Vietnamese businessman, reaffirming an earlier joint venture (JV) agreement.

The Malaysia-based LCC and Tran Trong Kien inked the MOU Dec. 6.

Tran is CEO of Hai Au Aviation Joint Stock Co. (HAA), Gumin Co. and Thien Minh Travel Joint Stock Co. Under the agreement, Gumin and HAA will hold 70% of the JV, with AirAsia owning the remaining 30%.

“AirAsia is an Association of South East Asia Nation (ASEAN) airline. And in ASEAN, Vietnam is one of the last remaining countries with a large population we’re not in. Today’s memorandum reaffirms our commitment to making AirAsia in Vietnam happen,” AirAsia Group CEO Tony Fernandes said. “Last year, when we announced this joint venture, we were bullish about Vietnam and we remain incredibly bullish about serving one of the most dynamic, fastest-growing economies in Asia.”

The new airline will accelerate the connectivity of Vietnam to the rest of South East Asia, Fernandes said. AirAsia has carried 12 million passengers to and from Vietnam since entering the market in 2005.

Tran said Vietnam’s international arrivals have doubled over the last three years and the country needs more connectivity for the tourism sector to reach its full potential.

“Adding a new airline, especially at this stage and with an experienced operator like AirAsia, is a much-needed and welcomed move. This new airline will bring more and better choices to our people in the years to come,” he said.

The new carrier will compete with local LCC Vietjet Air, which has about 45% of the domestic market share.

Chen Chuanren,