Asia's leading budget airlines, AirAsia, announced the termination of its participation in the Japanese joint venture with All Nippon Airways (ANA) on Tuesday due to "fundamental difference " in management.

"The joint venture, created two years ago under the name AirAsia Japan faced many challenges since its launch," the company said in a statement.

"Issues stemmed from 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," the statement said.

Accoring to AirAsia, the termination comprises an acquisition of the company's entire shareholding, 49 percent of the paid-up share capital in AirAsia Japan, by ANA Holdings Inc. for 2.45 billion yen (25.1 million U.S. dollars) . The termination also involves the return of all AirAsia aircraft leased to AirAsia Japan by Nov. 1, 2013 and the payment accrued from the leasing of the aircraft. The joint venture will also unwind the use of the AirAsia brand in its operations, including the name of AirAsia Japan.

AirAsia ventured into Japan in the hope of bringing in its successful experience in the Southeast Asian market, but the group CEO Tony Fernandes admitted Tuesday that "it is time for us to part ways."

He said the company will focus its attention on "running a true low cost carrier."

However, Fernandes remained optimistic on the Japanese market.

"Despite the cost issues, the AirAsia brand has resonated with Japanese customers and the trend we see for July and August is very strong for all of Japan. I remain positive on the Japanese market and believe there is tremendous opportunity for a low cost carrier to succeed," he said.

We have not given up on the dream of changing air travel in Japan and look forward to returning to the market,"he added.

AirAsia said the operations of its long haul affiliate AirAsia X in Japan would not be interrupted as a part of this termination as AirAsia X will continue the operations into Japan including Kuala Lumpur to both Tokyo and Osaka. Endi

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