Reports: AirAsia to partner Rakuten to launch Japanese LCC

KUALA LUMPUR: AirAsia Bhd is preparing to enter the low-cost carrier (LCC) market in Japan for the second time. This time it is with Japan’s biggest online retailer Rakuten Inc, according to reports by the Japanese press yesterday.

Toyo Keizai, a Japanese magazine, reported that Rakuten is in talks to become a major investor in a Japanese venture that AirAsia is planning to launch as early as July.

It also noted that AirAsia group chief executive officer Tan Sri Tony Fernandes would be visiting Japan next month to hold a news conference on the proposed venture.

When contacted by The Edge Financial Daily yesterday, Fernandes declined to comment.

“There are articles in the media that Rakuten intends to invest in a certain airline company. The information was not announced by Rakuten and there are no facts to be disclosed at the present time,” Rakuten said in a statement posted on the group’s website yesterday.

In August 2012, AirAsia had partnered Japan’s ANA Holdings Inc to operate a Japanese budget airline called AirAsia Japan, but the partnership was dissolved in June last year after both parties had differences in approach. The alliance was the fifth subsidiary of AirAsia and the ninth for ANA.

Toyo Keizai also reported that Rakuten is preparing to make a capital injection into AirAsia’s Japanese unit, possibly in 2015. Two or three more Japanese companies may also put cash into AirAsia Japan, it said.

Talks were also being held for Rakuten to get a stake of around 15% to 19% for a little more than ¥1 billion (RM31.68 million), according to Japan’s public broadcaster NHK.

It is said that AirAsia has already located its new firm at Japan’s Chubu Centrair International Airport near Nagoya, with the new LCC expected to link the airport in central Japan to other cities within the country.

In April, Fernandes had announced his plan to re-enter the Japanese market when he visited the country. However, Japan’s Ministry of Land, Infrastructure, Transport and Tourism still must approve AirAsia’s re-entry.

AirAsia shares closed up six sen or 2.71% at RM2.27 yesterday, giving it a market capitalisation of RM6.32 billion.

This article first appeared in The Edge Financial Daily, on June 27, 2014.

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