ANA To Ink Narrowbody Deals, Take Stake in Philippine Airlines

Japan’s All Nippon Airways (ANA) plans to order 38 aircraft from Boeing and Airbus and acquire a 9.5 percent stake in PAL Holdings, the parent company of Philippine Airlines, in a $95 million deal meant to give Japan’s largest carrier a greater foothold in the fast-growing Asian market. ANA said it will order 20 Boeing 737 Max 8s and take options for another 10, cementing its position as the first airline in Japan to introduce the type. Plans also call for an order of 18 Airbus A320neos for use by its budget subsidiary Peach Aviation. The parties have scheduled deliveries to take place between ANA’s 2021 and 2025 fiscal years.

ANA’s planned acquisition of shares in flag carrier Philippine Airlines would help fulfill the Japanese airline’s five-year strategy to achieve sustainable growth during the period leading up to the 2020 Tokyo Olympic and Paralympic Games. Although central to the five-year plan that began last year, entering partnerships with foreign airlines to speed expansion isn’t new for ANA; the Japanese airline purchased an 8.8 percent stake in state-controlled Vietnam Airlines in January 2016.

“Asia is a key growth market and we believe Philippine Airlines is in an excellent operational position to capitalize on both the strong uptick in air traffic growth as well as the vibrant, expanding Philippine economy,” said ANA president and CEO Shinya Katanozaka in a statement.

The investment by ANA represents a strategic shift for Philippine Airlines, which hopes to diversify its network and strengthen its bid to become a Skytrax five-star global airline by 2020. Philippine Airlines, which has engaged in talks with strategic investors since 2016, operates 84 flights weekly on nine routes to Japan. Last year the carrier carried about 17 million passengers and registered a load factor of nearly 80 percent. The airline’s target for 2019 specifies 19 million passengers and a load factor of 82 percent.

For its part, ANA operates 14 flights weekly on two routes to the Philippines. The two airlines also maintain codeshare operations on Japan-Philippines routes and domestic routes within each country, linking a total of 16 Japanese and 11 Philippine destinations.