Japan E-commerce giant Rakuten to tie-up with AirAsia

Rakuten is all set to venture into the air travel business

Japan's top E-commerce site operator Rakuten is all set to venture into the air travel business by allying with Asia's biggest budget carrier, Malaysia-based AirAsia.

 Rakuten is preparing to make a capital injection in AisAsia's Japanese unit, possibly in 2015, the Toyo Keizai economic magazine said on its online edition. Two or three more Japanese companies may also put cash into AirAsia Japan, it said.

According to the Tokyo Keizai economic magazine, Rakuten is expected to make a capital injection in Air Asia’s Japanese Unit in 2015. After the announcement the shares of Rakuten were up by 3.45 per cent to 1,316 yen in the early afternoon trade in Tokyo Stock Exchange.

Besides, public broadcaster NHK, expressed that talks were being held with the aim of Rakuten getting a stake of around 15-19 per cent for a little more than one billion yen (USD 9.8 million). Japan's aviation law limits a foreign equity stake in a Japanese airline to one-third.

AirAsia entered the Japanese market in 2012 in a joint venture with major carrier All Nippon Airways (ANA). The venture ended in a spat over business practices last year. ANA has since inherited the business and rebranded it Vanilla Air.