KUALA LUMPUR (Oct 5): AirAsia Group Bhd announced today that its 33%-owned associate AirAsia Japan Co Ltd (AAJ) is ceasing operations due to “highly challenging operating conditions”.
In a statement to the stock exchange, the low-cost carrier said it had been notified of the decision taken by the board of directors of AAJ to stop operations with effect from today.
“We respect and have agreed to the decision made by AAJ, as this would reduce the cash burn of AAJ and the company, amid the highly challenging operating conditions in Japan which have been aggravated by the Covid-19 pandemic that has plagued the world since early this year,” AirAsia said.
In a separate statement, AAJ said travel restrictions and uncertainties due to the pandemic 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,” the airline said.
AAJ, which owns three aircraft, has since its incorporation in July 2014, been operating domestic and international flights from its base in the Chubu Centrair International Airport in Nagoya.
AAJ stressed that the cessation only affects its domestic and international flights operations in Japan with the letter code DJ, and does not affect 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,” AAJ said.
(Report updated @8:58pm)