All Nippon Airways and AirAsia are in talks to turn poorly-performing AirAsia Japan around, and have not ruled out the possibility of dissolving the joint venture partnership.
"At this moment, nothing has been decided yet, but we don't deny any possibilities, this could be an option," an ANA spokesman said when asked whether the two carriers were considering such a move.
He explains that AirAsia Japan's load factor has barely surpassed the 60% mark because of reasons that include the lack of awareness of the AirAsia brand in Japan, a booking engine which Japanese customers are not accustomed to as well as slot and operating hour constraints at Narita airport.
In a bid to boost its load factor, both carriers brought forward the launch of a second hub at Nagoya airport in March. The hub is open 24h.
"At ANA Group, our strategy has not changed. We want to have a low-cost carrier business based in Narita. There is huge demand in Tokyo and in future, slots at Narita will increase. Sooner or later, more LCCs will be flying to Narita and before they come, we want to have the first advantage," the spokesman says.
AirAsia Japan's domestic and international load factors stand at 63.9% and 61.9% respectively. It operates a fleet of four Airbus A320s.
However, a news report from Nikkei.com on 10 June claims that AirAsia has decided to dissolve its AirAsia Japan partnership with ANA due to the LCC's poor performance.
AirAsia could not confirm this when contacted.
"Nothing has been decided yet. We're now in discussion and trying to find the best way to solve the current issues and to grow AirAsia Japan," ANA says.
AirAsia Japan recorded a net loss of ringgit (M$) 67 million ($21.4 million) in the quarter ended March.
AirAsia said then that the joint venture shareholders were exploring all options to improve the performance of the airline, and that it has greater challenges compared with other associates as it operates in a high cost environment. Apart from holding a 51% stake in AirAsia Japan, ANA also holds a 38.6% stake in another LCC, Peach. Peach, which operates out of a dedicated low-cost terminal at Kansai International Airport, recorded a load factor of 78.9% in the fiscal year 2012.