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Nippon Airways (ANA), Japan’s largest airline, and AirAsia Bhd have formed a 51:49 joint venture (JV) to create a five billion yen (RM190 million) AirAsia Japan Co Ltd that will be based at Narita International Airport.

The JV, described by AirAsia as a very profitable one, is already in talks for the setting up of a local low-cost carrier terminal (LCCT) at Narita.

Under the current agreement, AirAsia Japan is to fly out of Terminal 2 in Narita once the carrier is operational in August 2012.

AirAsia Japan hopes to be able to move into the Americas, particularly the western coast of the US within a year after it begins in 2012.

AirAsia chief executive officer Tan Sri Tony Fernandes, at a press conference yesterday, said that the airline was already in talks to get people into Japan and fly to Honolulu in Hawaii and then the west coast of Asia.

A few of AirAsia’s aircraft due for delivery in 2012 are expected to be handed over to AirAsia Japan to start services.

AirAsia Bhd will receive delivery of 14 new A330-200s next year.

AirAsia Japan, which could start with three planes and later ramp it up to five, will build routes that even ANA does not fly.

Fernandes expects AirAsia Japan’s fares to be lower than taxis fares in Japan and comparable to those available in Malaysia. Fares would be more attractive if plans for an LCCT materialise.

AirAsia’s 49 per cent stake will see revenue sharing of the same basis but will provide it with only 33 per cent voting rights.

The airline will fund its portion of the equity through internally-generated funds.

Asked if ANA’s affiliation with Peach Aviation, a new LCC, will affect AirAsia Japan, Fernandes said that he does not foresee any problems and that it merely gives more choices to Japanese customers.

Peach operates from Kansai International Airport. The agreement with AirAsia provides for non-competition between Peach and AirAsia Japan whereby Peach is not permitted to locate its base at the Narita International Airport.

President and chief executive office of ANA Shinichiro Ito said that ANA, as a partner in Peach, does not dictate the business direction of the airline.

Details on exact Japanese destinations are yet-to-be firmed.

The pact makes AirAsia Japan the first LCC to be based in Narita and serves both the domestic and international markets.

AirAsia Japan is also the first JV AirAsia has entered into with an airline.

While nothing has been formalised, news has been rife that Japan Airlines and Australia’s Jetstar are set to announce a partnership that would see the setting up of an LCC to service the domestic market.

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Bumi Armada Bhd, controlled by tycoon T. Ananda Krishnan, made a sterling listing debut amid weak overall market sentiment with more than 30 per cent premium over its initial public offering (IPO) price of RM3.03.

It closed RM1.11 higher to RM4.14 on a volume of 303.7 million shares, making it Bursa Malaysia’s top gainer and most active stock yesterday.

The stock opened 21 per cent higher at RM3.65, before rising to RM3.99 on a heavy trading volume of 201.9 million shares by midday.

Bumi Armada chief executive officer Hassan Assad Basma said the IPO received strong demand from both the international and Malaysian investors, including some of the biggest names in the investment community.

“From the initial opening, there seems to be a trend of demand and we think we are in the right direction. It’s beyond expectation but this is where hard work starts,” Hassan told reporters at the listing ceremony here yesterday.

On how Bumi Armada expects to perform from its listing debut given the current weak market, Hassan said: “We belong to the global scene and the outside market seems to be sluggish. Yes, there are uncertainties and choppy waters but we believe that our fundamentals are strong. That will help us ride out the wave.”

He said Bumi Armada will continue with its journey of growth as promised in its listing prospectus.

“It will be a hard work to build and expand our network. We expect more of the same good performance we achieved previously.”

Bumi Armada’s listing was the largest IPO in Malaysia and the second largest in Southeast Asia thus far this year.

The company’s market capitalisation, based on the IPO price of RM3.03 per share, was RM8.9 billion. The IPO comprised 878.54 million ordinary shares or 30 per cent of Bumi Armada.

Hassan said the company aims to become the world’s fourth largest floating, production, storage and offloading (FPSO) operator by end of 2013 from the current eighth position.

“The company is in a good industry spot as the oil and gas industry remains buoyant and there are ample investment opportunities. Bumi Armada is in the sweet spot of the industry despite many credible other players around.”

With a fleet of 43 offshore support vessels, two FPSOs and a derrick pipe-lay barge, Bumi Armada serves its customers in over 10 countries across Asia, Africa and Latin America.

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Tenaga Nasional Bhd posted a net loss of RM440.2 million for the third quarter of its current financial year due to additional fuel costs.

The country’s largest power producer said it incurred an additional fuel costs of RM1.3 billion in the third quarter ended May 31 2011 due to lower gas supply.

The lower gas volume made available is a direct impact from the maintenance shutdowns carried out at Petroliam Nasional Bhd (Petronas) gas supply facilities during the period.

For the nine months ended May 31 2011, TNB’s net profit was 67.9 per cent lower at RM903 million, compared to the RM2.8 billion profit it posted a year ago.

Revenue for the first nine months increased by 2.4 per cent to RM22.9 billion but operating expenses shot up 14.6 per cent to RM22 billion.

TNB expects the results for the full-year to be severely affected with coal prices currently trading above US$100 (RM299) per tonne, compounded by the higher cost generation using oil and distillate due to continuing lower gas supply.

TNB chairman Tan Sri Leo Moggie said that the severe gas curtailment had significantly impacted the group’s third quarter results.

“Due to the significant reduction in gas volume, TNB needs to replace the shortfall in gas volume by utilising more oil and distillate,” he told the media when announcing its third quarter results yesterday.

“It is going to be quite challenging,” TNB chief executive officer Datuk seri Che Khalib Mohamad Noh said.

The shortfall in gas supply meant that TNB had to spend additional RM59.1 million and RM675.2 million on more expen-sive oil and distillate, respectively to generate power during the third quarter.

In the same period, TNB’s coal consumption increased by 2.1 per cent. It had to endure a 5.4 per cent increase in coal prices that ultimately turned its books to red from a RM630.3 million net profit in the second quarter of its financial year.

The higher generation cost resulted in a margin erosion of 68.7 per cent to the group’s earnings before interest, taxes, depreciation and amortisation (Ebitda) to 6.6 per cent in the third quarter from 21.1 per cent in the second quarter.

Petronas is expected to conduct three more maintenance exercises this year which would limit gas supply.

Che Khalib said the cost of gene-ration using oil and distillate is about seven times that of gas.

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