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AirAsia to re-enter Japanese market

JIJI

Malaysian budget airline AirAsia said Tuesday it is resuming domestic flights in Japan after withdrawing a year ago, aiming for a summer 2015 launch.

Rakuten Inc., which runs an online travel site, is buying an 18 percent stake in AirAsia’s Japanese subsidiary, which is owned 33 percent by the largest low-cost carrier in Asia.

The subsidiary, AirAsia Japan, plans to decide on a hub airport and routes by the end of July.

Rakuten Chairman and President Hiroshi Mikitani said at a news conference that low-cost carriers are essential to boost the number of foreign tourists and to develop domestic travel.

Cosmetics maker Noevir Holdings Co. and sporting goods retailer Alpen Co. will own 13 percent and 7 percent of AirAsia Japan. Japanese law limits foreign stakes in domestic airlines to one-third.

AirAsia Japan plans to begin with domestic flights before launching international flights. The company will adopt the Airbus A320, an aircraft commonly used by budget airlines.

It will start operations with two A320s and increase the number of aircraft to four in 2015, after which it will introduce five per year.

The company hopes to operate flights into Tokyo’s Haneda airport, where the transport ministry is considering increasing the number of arrival and departure slots ahead of the 2020 Olympics.

AirAsia made its first foray into the Japanese market for low-cost flights in August 2012 in a partnership with All Nippon Airways. The partnership was dissolved in June 2013 after the business slumped.

AirAsia Chief Executive Officer Tony Fernandes expressed high hopes for Rakuten and the other partners, saying he has learned it is important to join forces with people with similar ideas.