KUALA LUMPUR, Oct 5 — AirAsia Group Bhd has announced the cessation of AirAsia Japan Co Ltd’s operation to reduce cash burn for the company and the group.
In a filing with Bursa Malaysia today, it said the decision was taken amid the highly challenging operating conditions in Japan which had been aggravated by the Covid-19 pandemic.
“We shall make further disclosures as necessary on this matter in due course,” it said.
The group has 66.91 per cent equity interest in AirAsia Japan with voting rights of 33 per cent.
Representative director and chief operating officer of AirAsia Japan, Jun Aida, said despite unrelenting efforts to sustain operations through successive and wide-ranging cost reduction initiatives, the company decided it would be extremely challenging to continue operating without any visibility and certainty of a post-pandemic recovery path.
“I would like to express our deepest gratitude and appreciation to our loyal guests and other stakeholders who have supported us all along. This painful decision to cease operations was decided neither in haste nor taken lightly. It was agreed upon after conducting a thorough business review.
“Further steps to this decision will be made in accordance with the applicable laws and regulations including the Japan Civil Aeronautics Act. We have cancelled all flights. All affected guests will be contacted via email with further information within the next seven days,” she said in a statement.
AirAsia Japan said the cessation only affected the domestic and international flights operated by AirAsia Japan in Japan with letter code DJ and did not affect other flights into and out of Japan operated by other airlines within the AirAsia Group.
“International services to Japan, from Malaysia, Thailand and the Philippines will resume in the future after travel restrictions are lifted and borders with Japan are reopened,” it said.
Since its incorporation in July 2014, the company said, it had been operating domestic and international flights from its base in Chubu Centrair International Airport, located just outside Nagoya.
“Travel restrictions and the uncertainties it created have severely curtailed demand for business and leisure travel resulting in flight reductions, cancellations and grounding of aircraft. These factors have weighed heavily on the company’s ability to continue operations,” it added.
On Thursday last week, AirAsia Group chief executive officer Tan Sri Tony Fernandes said the low-cost airline was open to exploring all options with regard to its operation in Japan, including closing it down.
“We have to look at every option, including closing down the operation. We haven’t reached a decision yet,” he said when asked to comment on reports stated that the group was planning to discontinue the operation of its affiliate, AirAsia Japan.
On the termination of AirAsia’s flights from Malaysia to Japan, he said that it was merely speculative and the board had not made a decision.
He added that currently, the airline was unable to fly to Japan due to the international border shutdown, and since its presence was relatively small in Japan, the board was evaluating all possibilities, including the cessation of its flights to the country.