Japan’s ANA invests $95M in PAL
By Denise A. Valdez
ANA HOLDINGS, Inc. (ANA HD), parent of Japan’s biggest airline All Nippon Airways, on Tuesday said it is acquiring a minority stake in the operator of Philippine Airlines (PAL) for $95 million (around P5 billion).
In a disclosure to the stock exchange, PAL Holdings, Inc. said ANA HD is getting 9.5% of the listed company from tycoon Lucio C. Tan, Sr.’s Trustmark Holdings Corp. — the biggest shareholder of PAL.
“We are honored and excited that a premier airline group such as ANA HD has decided to purchase shares in PAL Holdings… It is a great privilege to celebrate this historic occasion by strengthening our ties with ANA, as we aim to build a relationship that is mutually beneficial with an eye to a more progressive future,” PAL President Jaime J. Bautista said in the statement, referring to the 70th anniversary of PAL’s first flight to Japan on Jan. 29, 1949.
For its part, ANA said the investment in PAL will help its mid-term corporate strategy that started last year and will last until 2022, where it aims to expand its international group network by forging partnerships with foreign airlines.
“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,” ANA President and Chief Executive Officer Shinya Katanozaka said in the statement.
“We look forward to expanding our business relationship with Philippine Airlines so we can continue to serve our passengers even better,” he added.
The completion of ANA’s investment in PAL is still subject to several closing conditions.
For the past two years, PAL has been looking for a strategic investor to help the flag carrier achieve its goal to become a five-star airline. PAL was awarded its four-star rating last year and currently serves 84 flights weekly.
ANA has been a five-star airline since 2013 and operates 78 international routes and 118 domestic routes.
Prior to the deal, the two airlines already had an existing code share agreement, with PAL offering Japan flights operated by ANA.
Regina Capital Development Corp. Managing Director Luis A. Limlingan said the PAL-ANA deal is expected to be very beneficial to both parties.
“ANA would like to break the duopoly in Japan with these partnerships. PAL on the other would like to become a premiere five-star airline with more international routes,” he said in a mobile message.
Diversified Securities, Inc. Equities trader Aniceto K. Pangan also sees the entry of ANA as a positive for PAL.
“It should be positive for PAL considering that both have complementing routes… This should create synergies. The ANA HD investments should further enhance the expansion of PAL as they plan to use this for additional fleets such as AirBus, etc., thereby adding up to PAL’s growth,” Mr. Pangan said.
Investment analyst Rens V. Cruz II from Regina Capital noted PAL can “acquire operational expertise and/or tech upgrades once synergies between the two airlines are established.”
Shares in PAL Holdings rose 7% or P0.92 to close at P14 each on Tuesday.
