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TMCNet:  Rakuten to buy Into AirAsia Japan jv [GCTL Insights Magazine (China)]

[June 29, 2014]

Rakuten to buy Into AirAsia Japan jv [GCTL Insights Magazine (China)]

(GCTL Insights Magazine (China) Via Acquire Media NewsEdge) TOKYO, Jun 30 (GCTL) - Japan's biggest online retailer Rakuten plans to buy a major stake in a Japanese budget airline to be established by Malaysia's AirAsia, in a renewed bid to tap one of Asia's most lucrative air markets, Japanese media reported.


A foray into the airline business could help the acquisitive Japanese company controlled by Japan's fourth-richest man, Hiroshi Mikitani, boost its online travel site that is already one of the nation's largest.

A similar strategy was pioneered two decades ago by travel company HIS, when it set up Skymark Airlines, which has since become Japan's leading discount carrier.

For AirAsia, owned by one of Malaysia's wealthiest people, Tony Fernandes, it would be another attempt to expand into Japan after last year pulling out of a joint venture with Japan's biggest carrier ANA.

"Rakuten certainly makes sense. They can use Rakuten's platform and they can also carry e-commerce goods," said K. Ajith, an analyst at brokerage UOB Kay Hian in Singapore "For AirAsia, it's pretty clear that they won't face much interference in terms of how to run the airline," Reuters reported Fernandes declined to comment when asked if AirAsia was planning a venture with Rakuten. The Japanese company in a statement said it had nothing to announce at present.

Fernandes and Mikitani will announce the deal on July 1 in Tokyo, the Nikkei business daily said. Both men share a passion for sports, with Mikitani's company owning baseball team Rakuten Eagles and Fernandes the major shareholder in British football club Queens Park Rangers.

ANA blamed AirAsia's first flop on poor marketing and a non user friendly website, agreeing a year ago to buy its third of the company. It later rebranded the discount airline as Vanilla Air. Under Japanese law, a local airline joint venture cannot be more than 33.3 percent owned by a foreign firm.

(c) 2014 FocusAsia Media Ltd. All Rights Reserved. Provided by SyndiGate Media Inc. (Syndigate.info).

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