MINATO (dpa-AFX) - Japanese airline group All Nippon Airways Co Ltd. or the ANA Group (ALNPY.PK, ALNPF.PK, ANA.L) said Tuesday that it would acquire a 49 percent stake in the Myanmar-based airline Asian Wings Airways or AWA for $25 million or 2.5 billion yen. The company noted that the stake deal is part of its stated strategy of expanding into new international markets.
Meanwhile, ANA's investment in AWA represents the first investment by a foreign carrier in a Myanmar-based commercial airline
Under the investment, ANA would also work with AWA to enhance its operational and on-time performance and support its expansion into markets outside Myanmar.
ANA added that the completion of this equity tie-up is conditional upon obtaining the required permits and approvals from the authorities in Myanmar. It is also conditional on the signing of a final equity tie-up agreement with AWA and its shareholders.
AWA is a profitable airline currently operating only domestic services, and it plans to inaugurate international routes from October this year. The airline also plans to expand its aircraft fleet with a goal of operating ten A320 aircraft by 2018. AWA reported revenue of $17.8 million for the fiscal year ending March, 2013.
Further, ANA said that on Monday, September 30, it will increase the number of flights between Tokyo-Narita and Yangon to seven per week from three now. It also intends to introduce larger aircraft onto the route.
The company, which works to boost transport capacity between Japan and Myanmar, will also improve connectivity with onward flights operated by AWA to key cities in Myanmar, which is expected to contribute to ANA's own route network.
The company stated that its latest investment is in line with its corporate strategy for FY2013-2015 which involves diversification into new growth areas, centered primarily around airline-related businesses particularly in the Asian area. ANA expects that its investment in AWA will support its strategic goal of capturing an increasing share of the fast-growing Asian airline market.
ANA is also in preliminary discussions with Philippine Airlines Inc. for being a strategic partner, as confirmed by San Miguel in July. Philippines' largest diversified conglomerate, which acquired a significant stake in Philippine Airlines, including management control of the airline in April 2012, has been seeking a major foreign firm as a strategic partner in the airline and that the prospective partners included All Nippon Airways and Emirates Airline.
ANA shares closed today's trading at 208 yen, down 1 yen or 0.48 percent.
Copyright RTT News/dpa-AFX