Transport Airlines

AirAsia Readies For Second Try To Form Discount Airline in Japan

Feb 14, 2014 4:30 pm

Skift Take

Maybe the second time will be the charm for AirAsia in getting a low-cost carrier off the ground in Japan, although competition will be intense.

— Dennis Schaal

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Bazuki Muhammad  / Reuters

Malaysia's AirAsia Group CEO Tony Fernandes speaks during a news conference at Forbes Global CEO Conference in Kuala Lumpur September 14, 2011. Bazuki Muhammad / Reuters


AirAsia Bhd., the region’s biggest budget carrier, has decided on partners and top executives for a new discount airline in Japan after ending its tie-up with ANA Holdings Inc. last year.

The co-investors include listed companies, Tony Fernandes, the Malaysian low-cost airline’s group chief executive officer, said in a telephone interview in Tokyo today, without naming them. Yoshinori Odagiri, formerly chief executive of AirAsia’s Japanese tie-up with ANA, will head the new carrier with Osamu Hata, previously a chief financial officer at Japan’s Dell unit, taking the top finance role, he said.

“We’ve gone with people we think are like-minded and bring strategic value,” said Fernandes, during a visit to Japan to meet them. “The timing is excellent for Japan with the new economic thinking.”

Japan’s budget airline market has exploded in recent years, with three carriers starting flights in 2012, and Spring Airlines Japan Co. set to start operations in May. The economy has expanded since Prime Minister Shinzo Abe became prime minister in 2012, with the stock market jumping as his central bank governor pumps money into the monetary system.

AirAsia closed 3.9 percent higher in Kuala Lumpur today at 2.39 ringgit, its biggest biggest daily gain since Jan. 2, outpacing a 0.1 percent gain in Malaysia’s benchmark index.

The Sepang, Malaysia-based airline ended its venture with ANA last year due to a disagreement over strategy, with the Tokyo-based carrier re-launching the carrier as Vanilla Air.

Voting Rights

AirAsia will hold 33 percent of voting rights in the new carrier with flights probably starting next year, said Fernandes. An announcement will be made in April, he said.

It is considering airports including Nagoya’s Chubu airport and Osaka’s Kansai airport as possible bases for the new carrier and won’t use Tokyo’s Narita airport where its previous venture was based, Fernandes said. The carrier will fly internationally and domestically using Airbus Group NV A320s and be capitalized with as much as $70 million, he said.

–Editors: Barry Porter, Anand Krishnamoorthy

To contact the reporters on this story: Chris Cooper in Tokyo at ccooper1@bloomberg.net; Kiyotaka Matsuda in Tokyo at kmatsuda@bloomberg.net

To contact the editor responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net

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