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Friday July 15, 2011

AirAsia-ANA tie-up likely

Announcement on the collaboration is expected to be made next week

PETALING JAYA: AirAsia is likely to have a joint venture with Japan's largest carrier - All Nippon Airways (ANA) - to set up a low cost airline likely to be called AirAsia Japan.

An announcement on the collaboration is expected to be made next week and it would involve the setting up of a low cost carrier (LCC) and a hub in Japan by AirAsia. The LCC will serve the domestic market and eventually regional markets, sources say.

Like its other joint ventures in Indonesia, Thailand, the Philippines and Vietnam, AirAsia will partner ANA, which may lead in equity share holding but operationally, the Malaysian carrier will be in the driver's seat.

Whether this JV will involve ANA's recently launched low cost unit, Peach Aviation, is not clear.

The joint venture with ANA bodes well in terms of reach and connectivity for AirAsia. It will serve the domestic market and eventually regional markets together with ANA – AP

Peach, which is said to have received its Air Operators' Certificate from the country's Civil Aviation Bureau is owned by ANA in partnership with Hong Kong's First Eastern Investment Group and Japan's Innovative Network. All three parties own a 33.3% each in Peach.

Peach is supposed to operate in March next year from Kansai International Airport and AirAsia Japan probably will operate from either Tokyo or even Fukukoa.

There are plenty of choices for AirAsia to operate from including Fukukoa Osaka, Sapporo, Haneda and even Kansai.

Narita Airport, based in Tokyo, is the busiest airport in Japan and last year it said it would open a terminal exclusively for low-cost airlines in a bid to grab a larger slice of the increasingly competitive Asian tourism market.

For AirAsia which is still in expansion mode, the JV bodes well in terms of reach and connectivity. Even though AirAsia's sister airline, AirAsia X flies to Tokyo via Haneda, a hub gives the airline exposure to a new market, traffic and connectivity that enlarges its route network.

This venture will eventually translate to additional revenues for AirAsia in the longer term.

AirAsia joint venture in the Philippines is set to take off in October this year from Clark. Both ThaiAirAsia and IndoAirAsia have grown in size to become candidates for initial public offerings.

ANA is the eighth largest airline in the world by revenues and the largest in Japan by passenger numbers. Founded in 1952, it flies to 76 domestic and international cities in a fleet of 228 aircraft serving a network of 164 routes.

ANA has 33,000 employees and operates more than 1,000 flights a day. In 2009, it carried 44 million passengers.

ANA has been a core member of Star Alliance since 1999. It has a 47% share in Japan's domestic passenger services market.

ANA's rival is Japan Airlines (JAL) which is also in talks with Qantas to set up its own low cost airline. JAL is a member of oneworld and ANA has a code share arrangement with Malaysia Airlines.

ANA will also be launching the world's newest and most advanced passenger aircraft - the Boeing 787 Dreamliner this year.