Expedia increases stake in AirAsia joint venture
After recent moves to acquire Travelocity and Orbitz, Expedia is spending again to increase its stake in a joint venture with budget airline AirAsia.
The company will now own 75% of Air Asia Expedia (AAE Travel Ltd) while the airline will retain a 25% stake.
The added investment is worth RM306 million (US$86.3 million) in cash the company said.
AAE Travel was incorporated in 2011 and functions as Air Asia’s branded online travel portal.
"We started the joint venture (JV) with Expedia back in 2011 and together we’ve built a fantastic business. The vision of marrying Expedia, a globally recognised and highly regarded travel agency, with the AirAsia group network has yielded a significant return in just over three years," said Tony Fernandes.
"We remain committed as partners as Expedia continues to develop in this region, and this agreement will simultaneously allow for the AirAsia group to further develop and diversify its distribution network."
One analyst says the deal could give AirAsia more flexibility to seek additional partnerships with other online travel agencies.
"Now, AirAsia could forge partnerships with other online travel portal operators such as hotels.com or booking.com which are more widespread in the Asean region. This will diversify their online sale channels and boost the load factor," said RHB Research analyst Ahmad Maghfur Osman.
Expedia general manager for Asia, Vikram Malhi, last year conceded Expedia is a relatively new entrant in Asia Pacific and has a lot of catching up to do.
It made its first major move to redress this recently by snapping up Australian online travel agency Wotif.com
Bev
Editor in chief Bev Fearis has been a travel journalist for 25 years. She started her career at Travel Weekly, where she became deputy news editor, before joining Business Traveller as deputy editor and launching the magazine’s website. She has also written travel features, news and expert comment for the Guardian, Observer, Times, Telegraph, Boundless and other consumer titles and was named one of the top 50 UK travel journalists by the Press Gazette.
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