TOKYO: AirAsia Bhd and All Nippon Airways Group (ANA), Japan's largest airline, are teaming up to form a new low-cost carrier (LCC),AirAsia Japan Co Ltd.
AirAsia Japan, the first LCC to be based at Narita International Airport, will serve both domestic and international destinations when it begins operations in August 2012, subject to obtaining the relevant approvals.
The joint venture (JV) would see ANA holding 67% voting shares, with AirAsia holding the balance. It would also see ANA holding 51% on a capital basis in the partnership and AirAsia owning the remainder. AirAsia Japan will have a capitalisation of five billion yen (about RM190mil).
AirAsia group chief executive officer Tan Sri Dr Tony Fernandes said the carrier was proud to extend its successful low-cost business model to Japan and provide more opportunities for people to fly to destinations of their dreams with low fares.
ANA president Shinichiro Ito (left) and Tony Fernandes at the ceremony to announce the ANA-AirAsia joint venture. — AFP“AirAsia Japan will not only boost economic growth between Asean and East Asia by providing better access to markets around the region but also enhance links within travel, trade and tourism,” he said yesterday at a ceremony to announce the partnership.
Fernandes said the group was also proud to be identified as a low-cost carrier partner for ANA, a respected, credible and successful airline in Japan.
“This new JV is an important milestone in AirAsia's growth as ANA is the very first airline partner to form a JV with AirAsia,” he said.
He also said that AirAsia saw the JV as a platform to penetrate the US market through Tokyo.
“We might be serving flights to Honolulu in Hawaii, for example, from Narita in 2013,” he said, adding that AirAsia Japan would start with three new aircraft, with two more planes to be added later.
Having established an unmatched network, especially within the Asean region, AirAsia had been seeking a business partner with strong Japanese market influence to further expand its scope as well as contribute to strengthening bilateral ties between Asean and Japan.
ANA had been looking for opportunities to launch a new low-cost business based at Narita and, after analysis, had concluded that partnering with an existing low-cost carrier was the most efficient and strategically advantageous option.
ANA is the eighth largest airline in the world by revenue and the biggest in Japan by passenger numbers.
The formation of AirAsia Japan leverages AirAsia's successful business model and brings together the complementary strengths of the two companies, generating new demand with the aim of making affordable and quality travel available to all.
An aviation analyst with a local research house told StarBiz that the tie-up was a good move for AirAsia as it would boost the carrier's revenue stream due to ANA's high passenger yield.
The analyst said ANA's passenger yield was 3.5 times higher than AirAsia and was also higher than Singapore Airlines.
“This bodes well for AirAsia in terms of profitability as Japan is a high-income nation. With ANA's high passenger yield, coupled with AirAsia's low-cost base structure, it is possible for the JV to be profitable in its first year of operation.”
The analyst said in terms of domestic routes in Japan, the key challenges for the JV would be the existence of bullet trains in the country.
“For the JV to be successful, it should not overlap with the bullet train routes as these locomotives provide unlimited travel with cheap rates.”
MIDF Research said in a report that the JV would serve as the catalyst for AirAsia, moving forward, but cautioned that the threat of rising crude oil prices would remain a concern for all airlines.
A fund manager said the tie-up would strengthen AirAsia's footing in the region as the Japanese market was the third-largest economy with high per capita income.
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