All Nippon Airways May Invest in Philippine Airlines

An article published in the Wall Street Journal suggests that Tokyo-based All Nippon Airways may seek an equity stake in national flag carrier, Philippine Airlines. PAL has been in search of a strategic investor and airline partner to help improve the outlook of the airline and support expansion. 
ana philippine airlines investment
Copyright Photo: Angelo Agcamaran/PPSG
According to a statement by the Chief Executive of ANA Holdings, Shinya Katanozaka, the Japanese carrier is seeking to bolster its hold on Asian traffic through joint venture agreements and equity stakes. "We are approaching a number of Asian airlines," said Katanozaka in an interview with the Wall Street Journal.
Philippine Airlines had previously entered into discussions with ANA in late 2013, when former PAL President Ramon Ang was at the control of the national flag carrier. However, Ang issued a statement in January 2014, indicating that talks had been shelved and that ANA was no longer interested in an investment. Ang cited that others had meddled in the talks, which led to the demise of negotiations.
Although ANA became disinterested in a financial investment, it did remain interested in a strategic partnership through code-sharing. In October 2014, that agreement eventually materialized seeing both carriers code-share on a number of flights, while collaborating on frequent flyer programs.
Over the last year, ANA has enjoyed a boom period with net profit rising 51 percent between April to September, fuelled by heightened demand resulting from the low Japanese Yen. Katanozaka believes that the outlook remains bright as fuel prices remain low and demand remains strong.
Katanozaka confirmed that ANA is considering investments in Vietnam Airlines, Garuda Indonesia, and Philippine Airlines. A carrier from Myanmar also remains a possibility even after ANA previously scrapped plans to invest in Asian Wings. ANA already has existing cooperative agreements with both Garuda Indonesia and Philippine Airlines, which would see their cooperation deepen with a possible equity stake. However, ANA would be limited to a minority share with Philippines Airlines. But Katanozaka believes that dividends and closer collaboration will increase returns. 
ANA is seeking investments in other carriers to enhance its position in Asia at a time that its chief competitor, Japan Airlines, is in a bankruptcy restructuring process. As part of the restructuring, Japan Airlines has been restricted by the Japanese government with limits as to how much the carrier can grow until the end of the fiscal year in March 2017. This gives All Nippon Airways an opportunity to grow and take a market leading position in areas that its competitor cannot. Katanozaka wants to have the new equity stakes in place before the restrictions on Japan Airlines expire.
Although All Nippon Airways is also seeking to create possible joint venture agreements with Asian carriers to allow close coordination of pricing and scheduling, it is highly unlikely that Philippine Airlines would be a candidate. Members of Star Alliance are the most likely candidates due to the difficulties of partnering with airlines outside of the Star Alliance pact.
Philippine Airlines has not issued any statements regarding the possibility of an equity stake from All Nippon Airways. In 2013, the Centre for Asia Pacific Aviation released a report suggesting that there would be little to gain from an equity stake deal between the two carriers as little synergy exists. "The possible synergies between ANA and PAL are few," said CAPA in the report. "PAL has contentiously exited the Philippines' key low-cost segment and its long-haul ambitions will be challenging given the competition, its lack of geography or scale for connecting traffic, and a low profile without a global alliance or numerous partners."
References: Wall Street Journal

6 comments:

  1. Example: Hongkong to Manila is code-shared by CX and PAL, meaning, if I hold a PAL ticket for that route, I can use it for a CX flight - earlier or later and vice versa. The disadvantage is that passengers prefer the services and products of Cathay Pacific and I am one of them. I love PAL, but I use my logic all the time!
    This is what will happen to ANA and PAL. It is like choosing a real 100% gold versus an 18-carat one. This is the perennial problem of PAL. But on the good side, PAL can be a part of the mighty Star Alliance, hooray!

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  2. As the article said, the synergies between ANA and PAL are few. It is because they have common network particularly in Northern America and US main land. ANA passengers can connect with PAL networks within ASEAN but ANA has direct flights with ASEAN networks that flown by PAL or PAL passengers can connect with Northern America and US Mainland through ANA's hub but most of the main gate way in US and Canada where PAL are also flying direct flight so there are few benefits if they decided too. Code Share through Equity or Alliance are more beneficial if their HUBS are betrween 6-9 hours by flight like EY. PR can benefits more if they have equity alliance with EY through AUH. Because of strong presence of EY in European and African countries.

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  3. ANA is a 4-star and PAL is a 3-star. ANA is Japan's Largent and most profitable airline todate while PAL is the Philippines' second largest airline there (CebuPac is the largest). ANA has a strong, talented and aggressive management. PAL may have the same management level!
    LOL PAL!

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  4. I believe that they will invest money to philippine airlines, that is good investment too. cheap pack n play

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  5. This venture of ANA with Southeast Asian carriers like Garuda, PAL, Vietnam Air, etc., would maximize and empower ANA's grip on the market as a whole. Take Indonesia for example; it has the biggest population here in Southeast Asia. ANA is doing the right thing now before JAL will again recover from bankruptcy and Japanese competition will become intense again between these two rivals.

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  6. 뱃할맛이 나는곳 먹튀검증 안전한메이져

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