The airline, AirAsia (China), aims to capitalise on one of the fastest-growing air-travel markets in the world and one where low-cost travel is at an early stage. It would also be the first foreign-owned budget carrier in China.
Local company Plato Capital is teaming up with Malaysia-listed AirAsia, China's state-owned Everbright Financial Investment and private equity firm Oxley Capital to pursue the venture.
Catalist-listed Plato has entered into a non-legally binding term sheet to discuss definitive agreements for the proposed airline. The term sheet is valid for 12 months from yesterday.
AirAsia chief executive Tony Fernandes has a 6.33 per cent stake in Plato Capital. Plato's non-independent non-executive chairman, Mr Lim Kian Onn, is also a director of AirAsia X, the long-haul sister company of AirAsia.
AirAsia said in May that it was in talks with the China Everbright Group and the Henan government to explore a low-cost airline.
The joint venture company will be incorporated in Henan's capital city of Zhengzhou in Central China and have its operating base there.
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