AirAsia Group plans to launch its latest franchises in China and Vietnam later this year, as its current overseas affiliates demonstrate stronger financial performance.

AirAsia has taken steps to establish joint venture (JV) frameworks in China and Vietnam, and during its latest earnings presentation the group said it wants the new carriers to begin operating in the second half of 2018 “after obtaining the necessary approvals.”

Group CEO Tony Fernandes said one of AirAsia’s goals is to “continue to grow our presence and market share” in the Association of Southeast Asian Nations (ASEAN) region. He highlighted the proposed Vietnamese airline as “the final piece of the puzzle to complete our ASEAN connectivity.” The group has yet to reveal details about aircraft fleets for the two startup carriers.

AirAsia said its four ASEAN carriers—in Malaysia, Thailand, Indonesia and the Philippines—and its Indian affiliate reported operating profits in the fourth quarter, the first time they have all achieved this in the same quarter. The other JV in Japan is still in the early stages after beginning operations in October.

Fernandes particularly mentioned the turnaround of AirAsia Philippines, which has “proven that perseverance and our business model truly works,” he said. Philippines AirAsia achieved an operating profit of 665.3 million pesos ($12.8 million) in 2017, despite numerous one-off costs and 37% capacity growth. This unit is targeting an initial public offering in the second half of 2018.

AirAsia Berhad—including the core Malaysia operation and the Indonesian and Philippine units—reported a full-year net profit of RM1.59 billion ($405.6 million), down slightly from RM1.62 billion in the previous year. Revenue grew 14% year-over-year (YOY) to RM9.7 billion.

For the fourth quarter, net profit declined slightly to RM434.2 million, versus RM464.7 million a year earlier. Revenue increased 10% YOY to RM2.7 billion year-on-year. Unit revenue was down 4% YOY, although ancillary revenue increased by 19%. Unit costs dropped 1% in the quarter, despite higher fuel costs. Unit costs excluding fuel fell 5%.

AirAsia Bhd.’s capacity was up 14% in the fourth quarter and 9% YOY for the full year. The group-wide fleet added 30 aircraft, of which 24 were operational by the end of the year. Full-year traffic grew 11% YOY, resulting in load factor increasing by one point to 88%. AirAsia has a 55% share of the Malaysian domestic market, up from 47% a year earlier.

Adrian Schofield,