AirAsia Group is reportedly considering selling its 33% stake in AirAsia Japan to JV partner All Nippon Airways (ANA), with ANA to merge the carrier with its existing LCC subsidiary Peach (The Nikkei/AFP/Bloomberg/The Wall Street Journal, 11-Jun-2013). AirAsia will look to develop a new Japanese LCC in partnership with a Japanese company. AirAsia CEO Tony Fernandes said: “The problem is not with the model, it's with management.” Mr Fernandes added: “It's got to be run as a low-cost airline. The difficulties right now are that we just have different styles of running it." ANA spokesperson Megumi Tezuka said: “ANA would continue operating the business as a low-cost carrier from Narita airport even if the partnership with AirAsia is dissolved. ANA, which owns 67% of AirAsia Japan, may buy out AirAsia’s stake in the venture.”
AirAsia considering sale of AirAsia Japan stake to ANA
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The primary objective has to be securing more fifth freedom rights for one-stop service. Singapore is encouraging the ASEAN bloc to secure open skies with Japan, Korea and the EU since open skies will entail unlimited fifth freedom rights. Korea is unlikely to agree, with Japan hesitant. Fifth freedom liberalisation is a contentious item in the otherwise benign EU-ASEAN negotiations. Countries worry that granting unlimited fifths opens Pandora's box to growth – not just from SIA, but any number of airlines that are quiescent today but could aspire to be powerhouses in the future.
AirAsia exploring future opportunities in Northeast Asia: Chinese affiliate enticing, but difficult
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Elsewhere in Northeast Asia the opportunities are mixed. Korea and Hong Kong are becoming saturated and remain protectionist. Macau and Taiwan are unlikely to be big enough to support a local AirAsia unit.