AirAsia, a Japanese come-back

TOKYO – “I always dreamed about Japan. My young age was filled with objects and trends from Japan. Today my 13-year old son believes that he is Japanese while I never gave up the idea of being present in Japan“, explained Tony Fernandes in a large hotel in Tokyo city centre on July 1st, prior to the announcement of launching its new subsidiary AirAsia Japan. “However, I learned from past mistakes. Our second version of AirAsia Japan will be very different of the first one. It is done according to my wishes and without the involvement of large Japanese corporations but individual investors who want to move forward“, he said.
 

The first JV was in fact signed between Japanese airline giant All Nippon Airways and AirAsia but the cultural differences became rapidly impossible to manage. AirAsia finally decided to withdraw last October while ANA revamped its low cost subsidiary into Vanilla Air. Some iconic entrepreneurs joined this time the AirAsia bandwagon, including Rakuten CEO, one of the most charismatic leaders of a new Japan Inc. corporate culture.
 

This time however, Fernandes is moving more cautiously. On July 1st was only the announcement of the new JV but AirAsia Japan is unlikely to take to the sky before 2015. “We are still negotiating what will be our first base. We are looking at both Chubu Centrair airport near Nagoya and Kansai International Airport in Osaka. Both are currently underused and will be a good basis to develop our business. A decision should be announced at the end of the month” promised Yoshinori OD Odagiri, the new CEO of AirAsia Japan. The airline is due to start with two aircraft Airbus A320. Within a year, the fleet will grow to four aircraft and then expand by five units per year. “After five years, our fleet should comprise 28 aircraft“, told Odagiri.

 

The expansion strategy will follow AirAsia traditional development model. First AirAsia Japan will start with domestic destinations and then move into regional markets. “We think to serve neighbouring countries within four hours flying times, such as Taiwan, Korea, possibly China and the Philippines“, said AirAsia Japan CEO. Low fares – Japan domestic fares are among the highest in Asia costing on average 300 to 350 dollars for a Tokyo-Fukuoka or Tokyo-Sapporo, according to Odagiri.
 

AirAsia Japan wants to be also particularly active to open new regions in Japan as well as stimulating travel in some of Japan’s secondary markets. 
 

“Sapporo is for example an example of a perfect winter destination which will be able to attract Asian travellers dreaming to see snow“, added Tony Fernandes. For Yoshinori Odagiri, AirAsia Japan will not only fly trunk routes. “We foresee a potential of development in cities such as Aomori, Niigata or Sendai“, he told.
 

Meanwhile, Tony Fernandes believes that AirAsia Japan is likely to turn into one of the best performing markets for the group when looking at revenues. 
 

“Japan continues to generate enormous growth potential as the country remains at the heart of Asian culture and is very attractive for most Asians“, he declared. In the medium term, the carrier could then being complemented by another AirAsia X, made in Japan. “This is a long-term vision but this is a realistic one. AirAsia Japan will then help the AirAsia Group to reach new markets such as Los Angeles or Guam and Hawaii, while AirAsia India will move westwards with destinations such as Dubai or –why not- Africa. My ambition is indeed to connect Asia with the rest of the world on a one-stop offer. In the future, anyone could fly anywhere in Asia by just transferring once on one of our airlines“. The dream takes shape…