Shin Corporation ties up with AirAsia to form low fare airline in Thailand

Shin Corporation has formed a partnership with AirAsia to invest in a low fare airline business in Thailand with the establishment of AirAsia Aviation Co., Ltd. (AAA) in Thailand.

The investment is aimed to develop the transportation infrastructure in Thailand, expand the domestic aviation market by providing another transportation alternative for the people of Thailand and ultimately contribute to the growth of the country's tourism industry which will, in turn, stimulate the country's economic growth.

Shin Corporation will purchase AAA common shares, in cash, at par value of Baht 10 apiece plus 2 million Baht pre-operating cost or a total of approximately Baht 200 million. Upon sealing the deal, AAA will operate a low fare airline service with Baht 400 million registered and paid-up capital. Shareholding structure after the transaction will be Shin holding not less than 50% of paid-up shares and AirAsia holding not more than 49% of paid-up shares.

Boonklee Plangsiri, Chairman of Executive Committee, Shin Corporation, said "Shin has a policy to diversify its new investments out of the telecom industry to high potential and high growth businesses. We have chosen the low cost airline business because of the great potential market in Thailand with a population of 63 million, and we aim to continuously grow the tourism industry and promote Thailand as the Southeast Asian Gateway. In addition, the low fares will provide many people in Thailand with the opportunity to travel by air transport with convenience service, affordability and time saving, which will constitute the development in economy and society nationwide."

Tony Fernandes, Chief Executive Officer, AirAsia added, "The historic partnership exemplifies the beginning of an Asean brand. AirAsia is excited because the deal is very significant in the name of the Asean spirit of economic cooperation and integration."

AAA will commence its services in the beginning of next year (2004) with three Boeing 737-300. The initial routes include Bangkok, Chaing Mai, Phuket, Hat Yai, Kon Kaen and Nakornrachasima. The average fares offered for a single trip is normally 40-50% lower than other airlines e.g. for Bangkok to Chiang Mai the average fare will be not more than Baht 1,000 per trip.

This partnership is expected to strengthen Shin's future potential and growth and provide AirAsia will a platform to embark on its expansion plans and bring more low fares to the regional market.