Low cost carrier AirAsia already runs flights between Kuala Lumpur and the Philippines. But it just announced it will deepen its relationship by purchasing a 40%, US$8 million stake in AirAsia Inc, a new joint venture company with an initial working capital of US$25 million.

CEO Tony Fernandes said he expects the new operation to be profitable from the beginning, and is currently negotiating with Philippines’ authorities for final approval and is deciding whether to use Clark or Subic International Airport as its hub.

AirAsia already has subsidiaries in Indonesia and Thailand, and recently began flying to South Korea and Japan. While there are rumors the company plans to begin future operations in Vietnam and Singapore, Fernandes says they are focusing on the Philippines venture for the moment. The airline will fly both domestic and international routes, and promises to make affordable flying finally available Filipinos.

Supplementing the launch was AirAsia’s announcement it will also sponsor the Philippines Patriots, 2009-10 Grand Final Champions in the Asean Basketball League.

source & article: The Star online

update: BT: Existing Philiippines carriers are reportedly not happy about AirAsia’s entry into their market as they face cost-cutting problems of their own, but are ‘bracing for competition‘.