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Malaysia low-cost carrier AirAsia to re-enter market via Rakuten tie-up

Kyodo

Malaysian low-cost carrier AirAsia Bhd said Tuesday it will establish a new company in Tokyo to re-enter the Japanese market from which it withdrew last year.

Japan’s biggest online retailer Rakuten Inc. is expected to invest in the new AirAsia unit and cooperate with it in developing and operating air ticket reservation systems.

AirAsia expects to see an expansion in budget carriers’ share of air passengers in Japan that is now limited to 7.5 percent, far below the 30 percent-plus shares in North America, Europe and Southeast Asia, industry sources said.

For its part Rakuten intends to take advantage of its online retail know-how to develop air ticket reservation and sales systems that tie in with its travel business, the sources said.

The online retailer also hopes to expand its Southeast Asian business operations through the partnership with AirAsia.

AirAsia set up AirAsia Japan as a joint venture with All Nippon Airways Co. in August 2011 to launch low-cost carrier services.

But they terminated the joint venture in June 2013 over disagreements on sales strategy coupled with sluggish business performance.

AirAsia Japan has been renamed Vanilla Air, serving as an LCC unit of ANA Holdings Inc.