AirAsia Group has announced its intention to enter the ASEAN groundhandling market via a joint-venture with SATS Ltd.

In a filing with the Malaysian stock exchange, the low-cost carrier group said SATS had recently formed a new groundhandling entity, SATS Ground Services Singapore (SGSS), to cater to demand at Singapore Changi Terminal 4. Under the terms of that partnership, SATS will acquire a 50% stake in Ground Team Red Holdings (GTRH) in return for SATS’ 80% stake in SGSS and an aggregate cash consideration of SGD119.3 million Singaporean dollars (USD87.29 million).

GTRH will, in turn, be renamed SATS Ground Team Red Holdings Sdn Bhd and will be a 50:50 joint investment vehicle between AirAsia and SATS that will hold stakes in both its Malaysia and Singapore subsidiaries, Ground Team Red Sdn Bhd (GTR) and SGSS respectively. AirAsia will own 51% of GTR and 40% of SGSS while SATS will effectively own 49% of GTR and 60% of SGSS.

Both companies will also be responsible for growing the ground handling business in their respective markets and will explore oppurtunities in Indonesia, the Philippines and Thailand.