No-frills airline AirAsia has crossed the final hurdle to roping in foreign investors and will make an announcement in two weeks, a senior official said today.

The 19-month-old carrier obtained the necessary regulatory approval from the Foreign Investment Committee last week, the official, who declined to be named, told AFP .

"We will have a signing ceremony within the next two weeks and we will make a proper announcement then," he said.

AirAsia chief executive Tony Fernandes last month told AFP that foreign investors were expected to pump in some RM50 million to help finance its purchase of four Boeing 737-300 aircraft.

Officials familiar with the deal said three foreign partners -- from Asia, the Middle East and Europe -- would take a 25 percent stake in the airline.

Expansion on track

Today's New Straits Times said among potential investors were Virgin Atlantic Airways' boss Richard Branson and Dubai-based businessman Mohammed Ali Alabbar.

Five individuals currently control the company which has 500 employees, with Fernandes holding a 25 percent stake.

Fernandes was quoted by the daily as saying that AirAsia's plan to expand regionally next year was on track and he was unperturbed by news that Singapore Airlines' may convert its regional carrier SilkAir into a budget airline.

"A lot of full-service airlines such as British Airways have tried to do this and failed. It's something like asking Rolls-Royce to suddenly produce a car with similar standards to Toyota," he said.

AirAsia has said it initially planned to mount flights to Thailand, Indonesia, Philippines and China, and may select smaller airports to keep costs low.

The airline plans to increase its fleet by eight to 15 by this year, of which half will be leased.

The carrier, which started operations in December 2001, confounded critics when it achieved a profitable first year in which it flew 1.1 million passengers and logged a net income of RM12.03 million. -- AFP