Malaysia’s AirAsia is staking out the densely populated Southeast Asia as its medium-term operating territory, rejecting lucrative China as too problematic, even for the long term.

The highly profitable no-frills carrier, which boasts the world’s lowest operating costs, will become the largest user of Airbus A320s following an order for 25 of the type concluded on Dec. 5.

Its long-haul arm, AirAsia X, reports a strong performance from its budget services to Australia, instituted last month, and expects soon to order a further 10 A330-300s, firming up options it took when it ordered 15 in April.

AirAsia is a group of four companies with major equity links. The core business—Malaysian-registered AirAsia Bhd.—partly owns affiliates Thai Air­Asia and Indonesia AirAsia. Another affiliate, Fly Asian Express, runs the long-haul services under the AirAsia X brand.

“We are operating in a new regional center, which is Asean [Assn. of Southeast Asian Nations], which has a population of 600 million,” says founder Tony Fernandes, the chief executive of Air­Asia Bhd. “And that is where we will be focusing our business for the next five years.”

Chinese Civil Aviation Minister Yang Yuanyuan says AirAsia’s slogan, “Now everyone can fly,” describes his own dream for China, though Fernandes says he’s not tempted to expand AirAsia there.

“The problem with China is the Chinese state airlines,” which enjoy strong political backing. He says, “It would be a scary thing to go there right now. For us I don’t think a Chinese play is anywhere on the horizon.” He tells Aviation Week & Space Technology that he can’t imagine it ever happening.

The declared focus on Southeast Asia also rules out AirAsia setting up in India, Taiwan, South Korea, Japan or Australia in the next five years. Singaporean rival Tiger Airways flies in Australia and plans a South Korean subsidiary.

There’s more meaning in AirAsia’s slogan than is immediately obvious to westerners. While it isn’t literally true that everyone in Southeast Asia can now fly, the advent of low-cost carriers in the region has opening up air travel to millions of people for whom the economy fares of cosseted state full-service airlines were far out of reach.

And that’s reflected in the explosive growth of budget airlines in the area, which have defied skeptics who said the model wouldn’t work well in regions with long distances between major cities.