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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. |
