Business

Rakuten to buy into AirAsia’s Japan subsidiary

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Rakuten, the big Japan-based e-tailer, will acquire an equity stake in a Japanese subsidiary of AirAsia, Asia’s largest low-cost carrier, sources said Thursday.

AirAsia CEO Tony Fernandes and Rakuten CEO Hiroshi Mikitani are to announce the alliance in Tokyo on Tuesday, the sources said.

Rakuten’s equity stake in the AirAsia subsidiary is expected to be less than one-third. Rakuten, which operates a travel website, hopes to expand its travel business by utilizing AirAsia’s customer base and Asian routes.

Malaysia-based AirAsia recently established the Japan subsidiary, which plans to operate domestic flights using Chubu Centrair International Airport, in Aichi Prefecture, as its base.

The AirAsia subsidiary is to launch services during 2015.

The Civil Aeronautics Act restricts foreign ownership of Japanese airlines to less than one-third. AirAsia will hold a stake of less than one-third in its Japanese unit, with the remainder being split by several companies, including Rakuten.

AirAsia established a joint venture, AirAsia Japan, with All Nippon Airways in 2011. AirAsia Japan launched domestic services the following year. But the joint venture struggled and halted services last fall.

Fernandes announced his plan to re-enter the Japanese market when he visited the country in April. Japan’s Ministry of Land, Infrastructure, Transport and Tourism still must approve AirAsia’s re-entry.

[Source]

Categories: Business

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