It outlines how the parties will incorporate a joint-venture to be known as AirAsia (China) for the purposes of operating a low-cost aviation business based in Zhengzhou, the capital of Henan province in central China.
Commenting on the agreement, Fernandes said Zhengzhou was chosen as a base due to its strategic location and importance as a logistics hub.
"As China's gateway to Europe, Zhengzhou sits at the centre of a vast rail, highway and air transport network that forms the lynchpin of China's development plans for its central and western regions.
"This Chinese venture represents the final piece of the AirAsia puzzle. In just 16 years, we have successfully built a presence in Malaysia, Thailand, Indonesia, the Philippines, India and Japan, with China closing the loop on all major territories in Asia Pacific," he said.
AirAsia was the first foreign LCC to enter China and has carried more than 40 million guests since its inaugural route to China in April 2005. AirAsia and AirAsia X currently fly to 15 destinations in China and is the largest foreign LCC operating into the country.