The AirAsia Group will enhance its activities in the Japanese market after it received the green light from the national regulator for the relaunch of AirAsia Japan. The ‘new’ venture will take to the air in spring 2016 almost two and a half years after the former airline was rebranded Vanilla Air after a split between shareholders AirAsia and All Nippon Airways (ANA) after a disagreement over the management of the business.
The airline confirmed this week that it has been granted its Air Operator's Certificate by the Civil Aeronautics Act by Ministry of Land, Infrastructure, Transport and Tourism, under the air transport business, Japanese Aviation Law Article 100.
The original AirAsia Japan was established as a joint venture between AirAsia and All Nippon Airways (ANA) in August 2011 and launched operations the following year but struggled in what was a competitive marketplace. A statement from AirAsia at the time suggested that issues with the business were deeply rooted in the business model. The low-cost airline strategy is new to the Japanese market and AirAsia suggested that corporate business mentality was at least part of the problem.
It said the joint venture 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,” noting that the management team is predominantly comprised of ANA staff, starting with but not limited to the Chief Executive Officer and Chief Financial Officer positions.
“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,” it added in a formal statement confirming the joint venture termination agreement.
The original business initially launched operations from Tokyo Narita to the domestic destinations of Fukuoka, Okinawa and Sapporo on August 1, 2012 subsequently adding international flights from the Japanese capital to Seoul Incheon and Busan in South Korea from October 2012 and November 2012, respectively. A second hub was opened at Chubu Centrair International Airport in Nagoya in March this year with domestic connections to Fukuoka and Sapporo and an international link to Seoul Incheon being introduced.
The new business will operate from a base at Chubu Centrair International Airport in Aichi prefecture to Shin-Chitose Airport in Sapporo, Sendai Airport in Sendai as well as to Taiwan Taoyuan International Airport in Taipei. Alongside its previous experiences at the facility, AirAsia Group currently serves the airport with its AirAsia X long-haul business from Kuala Lumpur.
“We are very excited to be back in Japan. We have fantastic partners here and we are united in the vision to change the way people travel in Japan. Centrair Airport is a fantastic base and with our new routes, we look forward not only to enable the Japanese to enjoy our direct destinations but to connect them to the rest of Asia and beyond on our extensive network,” said Tony Fernandes, Chief Executive Officer, AirAsia Group.
The link between Nagoya and Sapporo is the busiest city pair from Chubu Centrair International and already served by five airlines with approaching one million annual seats in each direction. The Nagoya – Taipei market is the fifth busiest city pair and served currently by Cathay Pacific, China Airlines and Japan Airlines.
Chubu Centrair International this year celebrated its tenth anniversary of its opening in February 2005, when it replaced the former Nagoya Airport as the main gateway into the area. In that period it has seen its departure capacity actually decline as a number of airlines have ended service including American Airlines, Air Canada, Continental Airlines, Emirates Airline, Garuda Indonesia, Malaysia Airlines and Northwest Airlines.
Our analysis of OAG Schedules Analyser data shows that departure capacity has declined 18.7 per cent from 8.87 million seats in 2005 to 7.20 million this year. This year’s figure, based on published schedules is down slightly on 2014 (-0.5 per cent) but brings a third continuous year of stable capacity performance. Activities at the airport are dominated by AirAsia’s former business partner, ANA, which holds a 31.9 per cent capacity share, although a growing number of low-cost carriers are serving the market, including local ventures and examples from China and South Korea.
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