Budget carrier AirAsia said it plans to set up a joint venture in China in a bid to expand its reach in North Asia.

The Malaysia-based airline is also considering a dual listing on Hang Sang Index or the Hong Kong Stock Exchange. 

On the eve of Britain's Farnborough Airshow, sources told Reuters said AirAsia is looking at acquiring more aircraft to expand its fleet to meet growing demand in North Asia.

It also plans to set up a joint venture (JV) with a Chinese state-owned enterprise to capture traffic.

AirAsia's Chief Executive Tony Fernandes referred to the potential listing without naming the location via his twitter handle on Sunday.

A source quoted by the agency said AirAsia is in talks with various Chinese banks and shareholders including China's Everbright Bank. AirAsia's expansion in China comes at a time when the country is in the process to overtake western air travel market despite its economy slowing down.

On the other hand, the Hong Kong listing could raise the company's profile thereby allowing it to raise new capital.

AirAsia has been witnessing a growing demand in Korea and Japan and remains optimistic about its India operations after the country eased regulations for new airlines in its aviation sector, Reuters added.

Indian scenario

Last month, AirAsia Berhad, Malaysia's low-cost airline, offered 'fly like a superstar' discount on air fares. The promotional offer includes one-way ticket price of Rs. 786 to domestic destinations across India, which would be connected by AirAsia India. In the past too, AirAsia has offered discounted airfares in a bid to attract more passengers.

Earlier last month, the founder of AirAsia had acquired overseas citizenship of India. This gives the Malaysian citizen a status on par with NRIs when it comes to accessing financial and economic benefits, multiple entries into India and multi-purpose visa, aside from accruing financial and economic benefits.

Last month, AirAsia in India recorded 86.8 percent passenger load factor when compared to 84.8 percent load factor for the month of April 2016. This slight increase was primarily due to the onset of tourist season, according to DGCA data. AirAsia India recorded a market share of 2.2 percent in the Indian domestic civil aviation market during the last five months.