AirAsia-Japan CEO Kazuyuki Iwakata at the launch of Narita-Seoul flight in Tokyo

The joint venture was established in August 2011 to start low cost carrier operations out of Tokyo’s Narita International Airport, which saw the launch of AirAsia Japan in 2012.

AirAsia, in a statement issued today (June 11), said AirAsia Japan has been facing some challenges since its formation, attributing them to “a difference of opinion in management, most critically on the points of how to operate a low cost business and operating from Narita.”

It also points out that AirAsia Japan’s management “is predominantly comprised of ANA staff”, including its chief executive officer and chief financial officer.

The statement added, “Since its launch in 2012 AirAsia Japan has failed to track its proposed business plan due to the inability to manage costs but has seen customer adoption increasing as the AirAsia brand starts to resonate in the market.

“AirAsia continues to be optimistic and committed to Japan and sees the potential for a low cost airline to thrive in the market, and would not rule out any options to make this happen, including dissolution of the joint venture.”

Both AirAsia and ANA are exploring all available options, and any decision taken will be further subject to respective corporate approvals of both companies.

It was earlier reported in the Nikkei business daily that AirAsia was to the pull out of its partnership with ANA because of slumping business.

The newspaper said AirAsia group CEO Tan Sri Tony Fernandes reached a basic accord on the dissolution after discussions with senior officials of ANA Holdings, which owns ANA, that will see the Japanese airline buying AirAsia’s 49% stake of AirAsia Japan and turning the joint venture into a 100% subsidiary.