AirAsia Group Shuts Down Its Japanese Low-Cost Carrier

AirAsia Japan has ceased operations, citing flight reductions, cancellations and grounding of aircraft — factors that have "weighed heavily" on the low-cost subsidiary, it announced on Monday.

The airline, part of Malaysia’s low-cost carrier AirAsia Group, had been operating domestic and international flights from its base in Chubu Centrair International Airport, in the Aichi Prefecture in central Japan, since July 2014.

"Travel restrictions and the uncertainties it created have severely curtailed demand for business and leisure travel resulting in flight reductions, cancellations and grounding of aircraft. These factors have weighed heavily on the company's ability to continue operations," it said in a statement.

The decision to wind down the airline followed reports last week that directors had met in Kuala Lumpur to discuss the carrier's future.

The airline employed 300 people, and operated just three aircraft, according to Reuters.

"Despite our unrelenting efforts to sustain operations through successive and wide-ranging cost reduction initiatives, we have concluded that it would be an extremely challenging feat for us to continue operating without any visibility and certainty of a post-pandemic recovery path," said Jun Aida, representative director and chief operating officer at AirAsia Japan.

While several Latin American carriers have entered bankruptcy in recent months, AirAsia Japan's demise comes several months after the pandemic's first airline casualty, with UK regional airline FlyBe winding down in March.

The cessation does not affect other flights into and out of Japan operated by other airlines within the AirAsia Group, which in July reported a first-quarter loss of $187.91 million, its biggest since it listed on the Malaysian bourse in November 2004.

More recently, the group announced it had successfully pivoted the airline into a "digital lifestyle company, anchored on travel.”