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ANA-AirAsia Joint Venture Breaks Up - AirAsia Japan to Become New LCC

ANA-AirAsia Joint Venture Breaks Up - AirAsia Japan to Become New LCC

AirAsia Japan's Airbus A320

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ANA Holdings Inc., a parent company of All Nippon Airways Co., Ltd. (ANA), announced on June 25 that it has decided to dissolve its joint venture with Malaysian low-cost carrier (LCC) AirAsia Berhad. The company also terminated its contract with AirAsia that day due to the breakup.

By terminating the contract, AirAsia Japan Co., Ltd., an LCC 67% owned by ANA and 33% by AirAsia that the two airlines founded in August 2011 and that commenced domestic and international service based out of Narita Airport outside Tokyo in August 2012, will become a wholly owned subsidiary of ANA Holdings. Explaining its rationale for terminating the contract, ANA Holdings cited sluggish performance of JPY 3.5 billion in operating profit during the fiscal year that ended March 31, 2013.

ANA Holdings will use the AirAsia Japan brand until October 31. By mid-July the company says it will work out details such as the exact nature of its business and flight schedule from November onward. ANA Holdings hopes to make a fresh start with the airline as a new LCC by "reshaping its business model into one that suits the Japanese market and offering attentive service."

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