Frustrated AirAsia hints at dissolving AirAsia Japan partnership

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AirAsia has issued a strongly worded statement on the difficulties it faces working with All Nippon Airways, hinting at the possibility of dissolving its partnership in AirAsia Japan with the carrier.

The low-cost carrier says the joint venture has been facing challenges attributed 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 adds that AirAsia Japan's management team, including its chief executive and chief financial officer, is mainly composed of ANA staff.

Since the joint venture carrier's launch in 2012, it has failed to meet the objectives outlined in its business plan due to an inability to manage costs, AirAsia says.

"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," it adds. "The parties are exploring all available options and any decision will be further subject to respective corporate approvals of ANA and AirAsia Berhad."

Flightglobal Pro reported on 10 June that ANA is not ruling out the possibility of dissolving its joint venture with AirAsia, as the parties continue with talks on how to turn poorly-performing AirAsia Japan around.

A spokesman said that AirAsia Japan's load factor has barely surpassed the 60% mark because of various reasons, including a lack of brand awareness for AirAsia in Japan, a booking engine which the Japanese are not accustomed to, as well as slots and operating hour constraints at Narita airport.

However, it maintains that its strategy is to have a low-cost operation based out of 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 said.

AirAsia Japan recorded a net loss of ringgit (M$) 67 million ($21.4 million) in the quarter ended March.