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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 Austrlian online travel agency Wotif.com
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Editor for TravelMole North America and Asia pacific regions. Ray is a highly experienced (15+ years) skilled journalist and editor predominantly in travel, hospitality and lifestyle working with a huge number of major market-leading brands. He has also cover in-depth news, interviews and features in general business, finance, tech and geopolitical issues for a select few major news outlets and publishers.
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