AirAsia mulls breaking up with Japan's ANA

Budget carrier AirAsia mulls breaking up with Japan's ANA amid management clashes

Associated Press

KUALA LUMPUR, Malaysia (AP) -- Southeast Asia's top budget carrier, AirAsia, said Tuesday it may dissolve its partnership with Japan's All Nippon Airways Co. amid clashes over how to run their low-cost joint venture airline.

AirAsia said its Japanese affiliate has been facing challenges due to a "difference of opinion in management, most critically on the points of how to operate a low cost business" operating out of Tokyo's Narita airport.

AirAsia Japan, which is predominantly managed by staff from All Nippon Air or ANA, has failed to meet its business targets "due to the inability to manage costs" since its launch in August last year, it said in a statement.

ANA owns 51 percent of AirAsia Japan, with the rest held by AirAsia.

AirAsia said it remains optimistic about the success of a low-cost airline in Japan but it would not rule out any options "including dissolution of the joint venture."

"The parties are exploring all available options," and will make a final decision on this, it added.

Megumi Tezuka, a spokeswoman with ANA in Tokyo, said the company had no comment on the possible dissolution but acknowledged the partnership had some problems.

"Reports of possible breakup have come up in the past as well," said Tezuka, "with concerns over revenue and the number of customers. We're always considering ways to improve."

AirAsia Japan spokeswoman Kumiko Imai also said various options are being considered, including possibly ending the partnership with ANA.

AirAsia Japan flies to five destinations in Japan, as well as to Seoul and Pusan in South Korea out of Narita airport, one of the busiest airports in Japan. But Narita's restricted hours, congestion and high landing fees are a headache for budget carriers operating there.

ANA also holds a 38.7 percent stake in Peach Aviation, a low-cost joint venture with Hong Kong investment group, First Eastern Aviation Holdings. Peach was also launched last year, offering flights out of Kansai International Airport in Osaka, central Japan.

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