Vietnam's Civil Aviation Administration (CAAV) has rejected Malaysian budget carrier AirAsia's request to fly to the country's southern business capital Ho Chi Minh City, an official said today.

The company, whose subsidiary Thai Air Asia opened a route to Hanoi last year, had asked to open a route to the former Saigon in February.

"Traffic saturation at Tan Son Nhat aiport is the main reason for our refusal," Ho Quoc Cuong, CAAV deputy director, told AFP .

"Other airports in the country's center and north are more available."

20 airlines

Currently, more than 20 domestic and international airlines operate in the communist nation, including low-cost carrier Tiger Airways from Singapore.

The Association of Southeast Asian Nations is expected to enforce in 2008 an open-skies agreement making it easier for regional carriers to operate inside the bloc's borders.