A joint venture between Malaysian budget carrier AirAsia and All Nippon Airways in Japan has been abandoned due to disagreements over strategy.
ANA and AirAsia struggled over two years to find common ground on pricing, routes and sales infrastructure.
AirAsia said the failed venture “faced many challenges since its launch”.
There had been a “fundamental difference of opinion” between its shareholders on how the business should be managed, from cost management to where the domestic business operations should be based.
Air Asia Japan is to continue flying until October 31.
AirAsia founder Tony Fernandes said: “I have great respect for ANA as the leading legacy airline in Japan, but it is time for us to part ways and focus our attention on what we do best, which is running a true low-cost carrier.”
He said he was not entirely leaving the Japanese market, based on the “tremendous success” of long haul arm AirAsia X which serves Toyko and Osaka from Kuala Lumpur.
ANA executive vice-president Shinzo Shimizu was reported by the Financial Times as saying: “In Japan, people expect attentive care and meticulous service, even from an LCC [low-cost carrier].”
ANA said carrier would decide by the end of the month whether to relaunch AirAsia Japan under a new brand name or integrate it with its other low-cost venture, Peach Aviation.