British paper: Vietnam, an attractive market for Japan’s ANA airline

Vietnam could be an attractive market for Japan’s All Nippon Airways (ANA) as the Japanese airline has been pursuing a plan to expand its international operations since 2010, the UK-based Financial Times said in recent article.

Furthermore, like many other Japanese companies, ANA Holdings is making its way into Vietnam as it seeks to reduce its exposure to China, according to the article.

Japan’s biggest airline group by revenue has inked a memorandum of understanding with Vietnam Airlines, the national flag carrier of Vietnam, to purchase an 8.8 percent stake for VND2,431 billion, or US$108 million, it said.

According to the article, the deal enables the two carriers to code-share on certain routes between Vietnam and Tokyo. This means both airlines can expand their networks by selling tickets on some of each other’s flights.

The two carriers also agreed to combine their operations in aircraft maintenance, catering, check-in, and ground handling at airports in order to reduce costs.

Additionally, ANA will have the right to elect a representative to the board of Vietnam Airlines.

As part of its expansion plan, ANA has signed a deal to buy three Airbus A380 aircrafts, the world’s largest passenger jet.

ANA raised JPY170 billion, or US$1.4 billion, in an equity issued in 2012 while Vietnam Airlines launched an Initial Public Offering (IPO) in November 2014.

Direct investment by Japanese companies in Vietnam tripled to US$9 billion between 2011 and 2014, compared with the previous four years, the Japan External Trade Organisation (JETRO).