AirAsia will consider dissolution of Japan joint-venture

The budget carrier, in a media statement, said that it "would not rule out any options" to thrive in the market -- including dissolution of the joint venture.

Speculation on the two airlines parting ways heightened yesterday, after ANA spokeswoman Megumi Tezuka, in a Bloomberg report, said that ending the partnership in the venture is one option. However, she added that no final decision has been made yet.

"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.

"The parties are exploring all available options and any decision will be further subject to respective corporate approvals of ANA and AirAsia," said AirAsia in the statement today.

At 12.30pm, AirAsia shares rose 2 sen or 0.6 per cent to RM3.37 per share, with more than 2.7 million shares traded.

AirAsia Japan, which was set up in August 2011, is a 67:33 joint-venture between ANA and AirAsia.

Tezuka, in the Bloomberg report, said that ANA may buy out AirAsia's stake in the venture.

Meanwhile, in The Wall Street Journal (TWSJ) report, AirAsia chief Tan Sri Tony Fernandes said that the problem is not with the business model.

"The problem is not with the model, it's with management," said Fernandes in TWSJ article, who believes that AirAsia Japan will do well, but it "got to be run as a low-cost airline"

AirAsia, in its statement today, said that it has been facing some 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.

"The AirAsia Japan management team is predominantly comprised of ANA staff, starting with but not limited to the CEO and CFO.

"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," added the company in the statement.