AirAsia Japan to start in 2015 with five aircrafts; partners with prominent Japanese firms.
Maintain Buy rating and RM2.80 TP. ~ Alliance Research
In July 2014, AirAsia has announced it will set-up AirAsia Japan with Rakuten Inc (18%) and several other prominent Japanese firms, Noevir Holdings (9%), Octave Japan (19%) and Alpen Co (5%).
This is AirAsia’s second attempt at penetrating the Japanese Low Cost Carrier (LCC) market, which group CEO Tan Sri Tony Fernandes has touted as the cornerstone of the group’s global aspirations.
Given AirAsia’s dominant stake (49%) and it being the sole airline in the JV, it would be much easier for AirAsia to implement a consistent strategy to penetrate the Japanese market, compared to their first attempt which was called off around July 2013.
Operations are expected to start in 2015 with five aircrafts. Total equity investment is estimated at ¥7bn (US$70m).