An AirAsia plane sits on the tarmac at Kuala Lumpur International Airport, Malaysia August 28, 2016. Photo: Reuters/Edgar Su

AirAsia signed a joint venture agreement with China on Sunday to establish a low-cost carrier, with a base in the east-central city of Zhengzhou.

AirAsia (China) is a joint venture between AirAsia, Everbright Group and the Henan Government Working Group, the airline said.

AirAsia (China) will also invest in aviation infrastructure, including a dedicated low-cost carrier terminal at Zhengzhou airport and an aviation academy to train pilots, crew and engineers, as well as maintenance, repair and overhaul facilities to service aircraft, it said.

No further details on the low-cost carrier were provided.

Malaysian Prime Minister Najib Razak, who is on a visit to China, witnessed the signing of the joint-venture agreement.

“This Chinese venture represents the final piece of the AirAsia puzzle,” said AirAsia Group chief executive Tan Sri Tony Fernandes.

“In just 16 years, we have successfully built a presence in Malaysia, Thailand, Indonesia, Philippines, India and Japan, with China closing the loop on all major territories in the Asia-Pacific region.”

AirAsia and AirAsia X currently fly to 15 destinations in China and the group is the largest foreign low-cost-carrier operating into the country.

AirAsia is Asia’s largest budget airline. China’s Everbright Group is a state-backed financial firm.

Asia Times Financial is now live. Linking accurate news, insightful analysis and local knowledge with the ATF China Bond 50 Index, the world's first benchmark cross sector Chinese Bond Indices. Read ATF now.