Wednesday, 26 June 2013

AirAsia terminates Japan JV

PETALING JAYA: AirAsia Bhd has terminated its AirAsia Japan joint venture with ANA Holdings Inc, calling off the partnership with the Japanese airline due to differences in management.

The joint venture had faced numerous challenges from its inception, stemming mainly from a fundamental difference of opinion on cost management and the base of the domestic operations.

Earlier this month, the Malaysian low cost carrier (LCC) had hinted on the possibility of dissolving the joint venture.

AirAsia group chief executive officer Tan Sri Tony Fernandes (pic) had said: “I have great respect for ANA as the leading legacy airline in Japan but it is time for us to part ways and focus our attention on what we do best, which is running a true LCC.”

He had added that despite the cost issues, the AirAsia brand had resonated with Japanese customers and that he remained positive on the Japanese market, believing there was tremendous opportunity for a LCC to succeed tracking AirAsia X's success.

“We have not given up on the dream of changing air travel in Japan and look forward to returning to the market.”

The termination agreement comprises the acquisition of AirAsia's entire stake in AirAsia Japan by ANA for 2.45 billion yen (RM80.48mil).

AirAsia had subscribed to 25,120 voting shares and 23,880 non-voting shares at 50,000 yen per share, representing 49% of the paid-up share capital of AirAsia Japan.

AirAsia Japan will return all AirAsia aircraft leased to it and pay all monies accrued from the leasing of the aircraft to AirAsia by November this year.

It will also settle any outstanding invoices due to AirAsia accrued from the commencement of operations. The former will “unwind the use of the AirAsia brand in its operations, including the name of AirAsia Japan itself by November”.

Flights up to Oct 31 will continue as planned. Following the transfer of shares and payment of the purchase price, the shareholders agreement, the brand licence agreement and other commercial contracts between the parties will be terminated immediately.

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