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Myanmar Aviation To Be Supported by Japan’s ANA Holdings

Japan’s ANA Holdings will acquire a 49% stake in a Myanmar airline, the latest foray into a potentially lucrative market that is rapidly opening up.

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ANA Holdings intends to obtain the maximum portion allowed under local law as part of a plan to expand its network in Southeast Asia by using Myanmar as a hub, the Nikkei business daily said.

The company — the parent of major airline All Nippon Airways (ANA) — will spend nearly 3 billion yen (US$30.5 million) for the stake in Asian Wings Airways, the paper said, adding the payment would be made by the end of March 2014.

ANA said the company had no comment at the moment.

“If any decision is made, we will announce it promptly,” company spokeswoman Maho Ito said.

Shares in ANA Holdings were up 0.95% to 211 yen on the Tokyo Stock Exchange Tuesday morning.

Myanmar has stacks of airline routes available as most of its bilateral aviation agreements remain unused since post World War II days. In some instances the country enjoyed grandfather rights on aviation routes to particularly Europe, which due to sanctions remained dormant, but are now a valuable asset for any airline that can claim a home base in the country.

If confirmed, the ANA deal would be the first in the airline sector by a foreign company since Myanmar, which is also known as Burma, began democratising in 2011, the Nikkei said.

Asian Wings, based in the commercial hub of Yangon, operates domestic flights connecting 13 cities. It will also begin an international service this October on a route connecting Yangon and Chiang Mai in Thailand.

The Myanmar carrier is considered a mid-tier player in an industry packed with nine airlines, including the government-run Myanmar Airways.

With demand for travel in Japan expected to remain largely flat because of the greying, shrinking population, ANA is trying to capture rising demand in Southeast Asia, the Nikkei noted.

ANA’s new business model includes tapping regional travel demand by investing in local peers. Obtaining the Asian Wings stake marks the first such effort, it said.

In October, ANA restarted direct flights from Narita to Yangon after a 12-year hiatus, pointing to the rising number of business travellers and tourists headed to Myanmar.

It will employ larger aircraft and make the currently three-flights-a-week service daily from the end of September.

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