Wednesday, December 25, 2013

AirAsia finds new partners in Japan?

On December 19th, AirAsia (AK/AXM) director Tony Fernandes mentioned on Twitter that he had found partners for a new Japanese venture.

Their first Japanese venture AirAsia Japan (JW/WAJ) ended in a divorce with partner ANA Holdings, parent of All Nippon Airways (NH/ANA), only 10 months after launching operations in August 2012. AirAsia Japan ceased operations on October 26th and re-launched as Vanilla Air (JW/VNL) under 100% ANA ownership one day after the Twitter message.
The Japanese version of AirAsia's website has been posting this. (Image: AirAsia)

At that time, AirAsia blamed ANA's high-cost tactics and interference so that it would not cannibalize ANA's main-line profits, and ANA blamed AirAsia's unwillingness to make changes to the Malaysian reservations system, which was unpopular with the Japanese, as well as come up with alternative distribution channels. There were basic structural issues as well; a majority 67% of shares were controlled by ANA and the rest by AirAsia, all executives were appointed by ANA, its base was at slot-restricted and curfew-plagued Tokyo/Narita (NRT/RJAA), it flew some former ANA routes that could no longer be profitable at ANA's costs, but operated with AirAsia's livery, planes, and reservations system. After all, ANA has the highest cost base in the world at 11.71 US cents per available seat kilometres (ASKs) whereas AirAsia has the lowest with a cost per ASK (CASK) of 4.4 US cents in Malaysia. Tony Fernandes described the failure "it’s like a homosexual and a straight guy going to bed".

Does AirAsia have the right partners and recipe this time? Rumors have it that they are looking at setting up a base at a 24-hour airport in western Japan... there are only four; Nagoya/Chubu Centrair (NGO/RJGG), Osaka/Kansai (KIX/RJBB), Kitakyushu (KKJ/RJFR), and Okinawa/Naha (OKA/ROAH).

Source: Tony Fernandes @ Twitter (in English)

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