The AirAsia Japan joint venture stumbles. Can LCCs survive in Japan?

AirAsia announced on 11-Jun-2013 that its LCC joint venture with All Nippon Airways has "been facing some challenges attributed to a difference of opinion in management, most critically on the points of how to operate a low cost business and operating from Narita," and that it "would not rule out any options... including dissolution of the joint venture".

This is tantamount to talking of "irreconcilable differences" in a divorce case. If the two airlines have been unable to consummate something that meets their mutual goals after almost a year of operations, this is an ex-marriage.

Even ANA, less bluntly, effectively acknowledges that the partnership hasn't worked and that it is considering combining the operations of its part-owned Peach with the residue of the AirAsia Japan operation.

So where to next? The next steps could be the genesis of a whole new scenario, or - something less. AirAsia might withdraw completely, form a financial JV partnership - or perhaps go back to talking to Skymark.