AirAsia taking second shot at Japan in tie-up with Rakuten

Kuala Lumpur/Tokyo – Asia’s largest budget carrier, AirAsia Bhd, is giving the lucrative Japanese air travel market a second crack in a partnership with Rakuten, Japan’s biggest online retailer, to form a new budget carrier – AirAsia Japan.

The Malaysia-based low cost carrier’s first attempt in a joint venture with Air Nippon Airways ended in June 2013 due to a difference of opinion in management and on ways to operate the business. The Tokyo-based carrier has since relaunched as Vanilla Air, owned by ANA, based out of Tokyo’s Narita Airport.

But AirAsia group CEO Tan Sri Tony Fernandes (left) is upbeat this time round saying, “This is AirAsia part two, and I hope there is no part three.”

The new low cost airline is expected to take to the skies next year. It will have an initial capital investment of about ¥7 billion (US$69 million),

AirAsia will hold the largest stake in the new carrier with 49%, with Rakuten as the third largest shareholder at 18% after Octave Japan Infrastructure Fund with 19%. The latter was incorporated in Japan in May with a mission to acquire, own, manage, hold, sell and dispose of the shares of AirAsia Japan, as well as make collections from the shares of AirAsia Japan.

The remaining shares are held by Noevir Holdings 9%, which has interests in cosmetics, pharmaceuticals and health food, apparel and aviation business; and Alpen 5%, which makes and sells sporting goods and manages ski resorts, golf courses and fitness clubs.

The CEO of the new airline is Yoshinori Odagiri, formerly the chief executive of the JV with ANA. He said AirAsia Japan would start operations with a fleet of five aircraft. It will fly to both domestic and international destinations, but  has yet to decide at which airport it will be based.

“We are ready to take on this challenge and with great teamwork, we hope to bring AirAsia’s successful low-cost business model once again to Japan. Our counterparts in Malaysia, Thailand, Indonesia, the Philippines and India have seen great and encouraging responses in their markets, and we will work towards the same for Japan,” he added.

Fernandes said the AirAsia Japan team is working hard with the relevant authorities to obtain operational approval. “We hope that all will be in place to start both domestic and international flights by the summer of 2015.”

When the JV with ANA ended Fernandes said: “We have not given up on the dream of changing air travel in Japan and look forward to returning to the market.” And he has done just that. Source: WIT