AirAsia to cut ties with Japan's ANA

AirAsia and All Nippon Airways are set to announce the dissolution of their tie-up in Japan on Tuesday, reports said, because of slumping business.

This file photo shows CEO of AirAsia, Tony Fernandes, speaking during the announcment about AirAsia's tie-up with Japan's All Nippon Airways (ANA), in Tokyo, on July 21, 2011. Both airlines are set to announce the dissolution of their tie-up on Tuesday, reports say, due to slumping business.

Malaysia-based AirAsia is to withdraw from AirAsia Japan, a company it jointly formed with ANA to begin low-cost carrier operations out of Tokyo's Narita International Airport in August 2012, Kyodo News reported, citing unnamed sources familiar with the matter.

AirAsia aims to establish a new budget airline in partnership with another Japanese carrier after parting company with ANA, Kyodo said.

A senior AirAsia executive told the newswire on Monday that the company had made its decision and an announcement would be made Tuesday.

The report came two weeks after a similar report by the business daily Nikkei, which said the two airlines agreed that ANA would buy the 49 percent stake held by its Malaysian counterpart and turn the joint venture into a 100 percent subsidiary.

The airline's Japan service is likely to continue under the Peach Aviation brand when AirAsia Japan's service finishes at the end of October, it said.

Peach Aviation is an ANA group budget carrier based at Kansai International Airport, western Japan.

ANA earlier Tuesday said in a statement: "We are discussing the issue with AirAsia, and we will announce it swiftly once we reach an agreement."

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