Malaysia-based AirAsia signed the termination agreement with Ail Nippon Airways (ANA) today (June 25), confirming earlier reporter it was ending the partnership and exiting the joint venture, AirAsia Japan, due to a difference of opinion in management and on ways to operate the business. (read story here)
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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.
In announcing the ending of ties with ANA, AirAsia in a statement cited the many challenges faced by the joint venture since its launch as one of the reasons for its withdrawal from the partnership.
“Issues stemmed from a fundamental difference of opinion between its shareholders on how the business should be managed from cost management to where the domestic business operations should be based.“ added the statement
The termination will see ANA Holding acquiring AirAsia’s 49% in AirAsia Japan for ¥2.5 billion (US$25.6 million), the return of all AirAsia aircraft leased to AirAsia Japan by November 1, payment of all fees accrued from the leasing of the aircraft, and unwinding the use of the AirAsia brand by AirAsia Japan by November 1.
However, operations of AirAsia Japan flights up to October 31, 2013 will continue as planned.
The ending of ties will not affect operations of AirAsia X, the long haul low fare affiliate of AirAsia, and it will continue its services into Japan including Kuala Lumpur to both Tokyo (Haneda) and Osaka (Kansai).
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Tony Fernandes
Following the transfer of shares and payment of the purchase price, the Shareholders Agreement, the Brand License Agreement and other commercial contracts between the parties will be terminated immediately.
AirAsia CEO, Tan Sri Tony Fernandes, said, “I have great respect for ANA as the leading legacy airline in Japan but it is time for us to part ways and focus our attention on what we do best, which is running a true LCC.
“Despite the cost issues, the AirAsia brand has resonated with Japanese customers and the trend we see for July and August is very strong for all of Japan.”
Fernandes remains positive on the Japanese market and believes there is tremendous opportunity for a LCC to succeed, as proven by AirAsia X’s success.
“We have not given up on the dream of changing air travel in Japan and look forward to returning to the market,” he added.
