A planned partnership between All Nippon Airways and a private Myanmar airline, Asian Wings, has been cancelled because of concerns over the viability of the project, the two sides announced on July 30.
The two airlines signed a partnership agreement in August 2013 under which ANA, Japan’s largest airline group, was to pay US$25million for a 49 percent stake in Asian Wings. It was touted as the first deal between an international airline and a domestic carrier and the ensuing joint venture would have had 10 Airbus A320 aircraft by 2018.
However, Asian Wings confirmed that ANA was later put off by the small size of the domestic market and strong competition from more than half-a-dozen other domestic carriers.
“It is true that ANA cancelled the deal because the market is too small and competition is getting high. There are now 10 local airlines,” said Asian Wings chief executive officer U Kyi Win.
The decision was taken after ANA conducted a market survey following the signing of the agreement, he said, adding that Asian Wings is now on the lookout for other partners.
“We are losing [money] this monsoon season but we look forward another foreign partnership in the future. To date we have invested about $25 million in our airline.”
ANA indicated in a statement announcing the end of the deal that it had sought to change the terms of the original arrangement and Asian Wings had refused to budge.
“Competition between new and old airlines in Myanmar has intensified. It brings rapid changes in environment calling into a question the assumptions made at the time of original decision,” said a Travel Daily Asian report, quoting ANA’s statement.
“Ultimately negotiations for capital participation with Asian Wings were unable to reach an agreement and investment plan was cancelled as a result,” it said.
Asian Wings Airways was registered in September 2010 as a Myanmar-owned private airline. Investors are said to include air ticketing agency Sun Far and tycoon U Tay Za, owner of rival Air Bagan.
Asian Wings launched its flights in early 2011 and services 13 domestic destinations with two aircraft.
U Kyi Win denied the airline has any links to U Tay Za.
Source: MYANMAR TIMES