All Nippon Airways buys 8.8 per cent of Vietnam Airlines

ANA announced on January 12 that the group spent VND2.4 trillion ($108 million) on the purchase. The two sides signed a memorandum of understanding (MoU) on the strategic partnership. The official purchasing contract is going to be signed in the first quarter of 2016.

The partnership will also provide for ANA and Vietnam Airlines to enable both to take maximum advantage of the increasing demand for air services in the Asian market and, in particular, in the Cambodia-Laos-Myanmar-Vietnam group of countries which has one of the highest growth potentials in the region.

Shinya Katanozaka, CEO of ANA Holdings Inc., said: “Asia is a key growth market for ANA as we expand our international footprint and Vietnam Airlines makes the ideal partner for us because we share the same high standards and approach to customer service and efficiency. We look forward to completing this strategic investment and launching our partnership so we can serve our passengers even better.”

In addition, ANA will dispatch one member to the board of Vietnam Airlines and will also provide Vietnam Airlines with operational and management knowhow to help support service quality.According to the MoU, ANA will share with Vietnam Airlines experience in management and help the latter improve service and optimise operations.

“We appreciate the cooperation with ANA to participate in the administration and long-term development of Vietnam Airlines. ANA is one of the leading airlines in the region and in the world,” Pham Viet Thanh, chairman of Vietnam Airlines said. “The cooperation with ANA Group will help Vietnam Airlines acquire new management technologies, expand the market, improve service quality, increase competitiveness on international markets. I strongly believe this comprehensive cooperation will enhance the value, brand and image of Vietnam Airlines.”

ANA and Vietnam Airlines will expand their networks, share services in Japan and Vietnam. Vietnam Airlines now has 66 flights each week on 10 routes between Japan and Vietnam while ANA has 14.

Other foreign partners still have room to buy into Vietnam Airlines as the latter announced in March that it would sell 20 per cent of its shares to up to three strategic partners. ANA has a fleet of 240 aircraft, with 88 destinations, carrying 47 million passengers per year. ANA is Japan’s biggest airline in terms of revenue and number of passengers.

Vietnam Airlines now has 95 routes to 21 domestic destinations and 29 international destinations, with 360 flights per day. The company now has a fleet of 87 aircraft including Boeing 787 Dreamliners, Airbus A350-900 XWB, Boeing 777, Airbus A330 and Airbus A321.

In 2015, Vietnam Airlines’ consolidated revenue was VND69.3 trillion ($3.2 billion), pretax profit of VND1.4 trillion ($65.7 million). Of the amount, the parent company Vietnam Airlines and VASCO had revenue of VND57.1 trillion ($2.7 billion) and pretax profit of VND260 billion ($12.2 million).

ANA opened the Hanoi-Haneda route in March last year, its second route in Vietnam after the Ho Chi Minh City-Narita route which debuted back in 2001. In October 2015, ANA was reported to be in negotiations over a strategic stake at Vietnam Airlines, and the two parties were expected to finalise the deal in the first quarter of 2016.

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