ANA plans to start flights from Myanmar in 2018 with venture

[TOKYO] ANA Holdings Inc has invested in a new airline venture in Myanmar that aims to start international flights in 2018 as the Japanese carrier seeks to capture demand in Asia's fastest-growing economy.

ANA has a 49 per cent stake and a local company holds the remainder, Shinya Katanozaka, chief executive officer of Japan's largest airline, said in an interview in Tokyo Monday. The companies made a combined initial investment of US$150,000 in the venture, he said.

The Japanese carrier is expanding abroad as more people take to the skies in developing economies such as Myanmar, which the International Monetary Fund forecasts will expand 8.1 per cent this year, the quickest pace after Iraq. ANA is making a bet on international travel from the Southeast Asian nation after the carrier in 2014 cited intensified competition in Myanmar for its decision to cancel a plan to buy 49 per cent of Asian Wings Airways Ltd, a domestic airline.

"Myanmar's economic power is growing," said Mr Katanozaka. "We want to help contribute to the boom in business and overseas holiday travel from the new middle class." ANA, which bought a stake in Vietnam Airlines Corp this year, is also considering adding flights across the globe, Mr Katanozaka said. The carrier added flights to Phnom Penh this year and will start a service to Mexico City next year.

ANA joins companies including Coca-Cola Co and Unilever Plc in expanding in Myanmar, after the US eased some sanctions in the nation four years ago as the country moved toward democracy following five decades of military rule.

The Japanese carrier restarted flights to Myanmar's Yangon airport in 2013 and is the only airline to offer direct flights between Japan and the country.

The Myanmar venture will begin with a couple of airplanes and plans to increase the fleet, he said. ANA's investment will rise as the venture adds aircraft, Mr Katanozaka said.

ANA is also expanding the fleet of wholly owned subsidiary Vanilla Air Inc, which started flights two years ago and uses Airbus Group SE A320s for domestic as well as international routes. Vanilla has 10 aircraft and plans to expand its fleet to 25, according to ANA's mid-term plan through March 2021.

"We want to start medium-distance flights," said Mr Katanozaka. "We're considering what planes we need and will make an announcement next fiscal year" starting April 1, he said, without identifying destinations.

Vanilla is a founding member of the Value Alliance started this year, comprising low-cost carriers such as Singapore Airlines Ltd's Scoot and Nok Airlines Pcl in Thailand. The group aims to sell tickets and extras such as baggage allowance and in-flight meals across the alliance's eight airlines in a single transaction.

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