Malaysia's AirAsia confirmed Tuesday it is ending its low-cost airline joint venture with All Nippon Airways.
AirAsia, Asia's largest budget airline company, said in a statement both had signed a termination agreement.
"The joint venture, created two years ago under the name AirAsia Japan, faced many challenges since its launch. Issues stemmed from a fundamental difference of opinion between its shareholders on how the business should be managed from cost management to where the domestic business operations should be based," the statement said.
AirAsia Bhd through AirAsia Investment Ltd. had subscribed 25,120 voting shares and 23,880 nonvoting shares at ¥50,000 per share, which represented 49 percent of the paid-up share capital in AirAsia Japan.
Under the termination terms, ANA Holdings Inc. will acquire AirAsia's entire shareholding in AirAsia Japan for ¥2.45 billion.
All AirAsia aircraft currently leased to AirAsia Japan will be returned to AirAsia by Nov. 1 together with all money accrued from the leasing of the aircraft.
AirAsia Japan will also settle all outstanding invoices due to AirAsia accrued from the commencement of operations.
AirAsia Japan will unwind the use of the AirAsia brand in its operations, including the name AirAsia Japan itself, by Nov. 1.
Operations of AirAsia Japan flights up to Oct. 31 will continue as planned.
"I have great respect for ANA as the leading legacy airline in Japan, but it is time for us to part ways and focus our attention on what we do best, which is running a true LCC," AirAsia Group Chief Executive Tony Fernandes said.