RANGOON — Japanese airline ANA has abandoned its plan to invest in Burmese carrier Asian Wings, citing “intensified” competition in the aviation sector here.
ANA Holdings, the parent company of All Nippon Airways, announced in August 2013 that it would pay US$25 million for a 49 percent stake in Asian Wings Airways (AWA). The deal reportedly would have involved the Japanese group leasing aircraft to the small Burmese airline and providing training for its pilots.
On Wednesday, ANA Holdings posted an announcement on its website declaring that its board of directors had agreed to cancel the investment.
“[C]ompetition between new and old airlines in Myanmar has intensified, bringing rapid changes in the external environment, and calling into question the assumptions made at the time of the original decision,” the statement said in explanation of the cancelation.
“Ultimately, negotiations for the capital participation with AWA were unable to reach an agreement, and the investment plan was canceled as a result.”
The original agreement came amid hype about Burma’s aviation sector, as the government of President Thein Sein began a program of reforms, raising hopes that business visitors and tourists would flock to the country. Visitor numbers have indeed risen, but some airlines have cut down flights into the country after an initial rush led to overcapacity and empty seats on flights.
The ANA-Asian Wings deal raised questions at the time as Asian Wings—which flies mostly domestic routes and was only formed in 2010—had been linked to Htoo Group chairman Tay Za, who appears on the US Treasury Department’s Specially Designated Nationals list.
When the investment was announced, however, Asian Wings officials denied any link to Tay Za, saying instead that Than Oo, a director at the modest local firm Sunfar Travels and Tours Company, was backing the airline. Tay Za has complained of business problems resulting from US sanctions against his airline Air Bagan—which also has a code-sharing arrangement with Asian Wings.