AirAsia Group shut down its operations in Japan with immediate effect. Its majority-owned subsidiary AirAsia Japan (AAJ) is not financially strong enough to continue its operations under “extremely challenging operating conditions” which were caused by the COVID-19 pandemic.
AAJ, the smallest airline-unit of AirAsia Group, stated that it had been notified by the board of directors to cease operations in Japan from October 5, 2020. The decision was made after a thorough business review earlier in September 2020. AirAsia Group expected that the termination of operations would help to reduce the cash burn of AAJ and the group.
“Despite our unrelenting efforts to sustain operations through successive and wide-ranging cost reduction initiatives, we have concluded that it would be an extremely challenging feat for us to continue operating without any visibility and certainty of a post-pandemic recovery path,” Jun Aida, the Representative Director and COO of AAJ, announced in a press release.
“Further steps to this decision will be made in accordance with the applicable laws and regulations including the Japan Civil Aeronautics Act,“ added Aida.
AAJ was incorporated into the group in 2014. Since then, it was operating domestic and international flights with three Airbus A320 on its fleet from its base in the Chubu Centrair International Airport (NGO) in Nagoya, central Japan.
AirAsia Group informed that the closure of AAJ operations would not have any impact on the other group air carriers’ operations in Japan.