DALLAS — Due to the ongoing cost of running the cargo airline, Nippon Cargo Airlines (NCA) parent company Nippon Yusen Kaisha (NYK) has decided to transfer all shares to All Nippon Airways Holdings (ANA), with ANA taking over the cargo airline.
Nippon Yusen Kaisha stated that NCA has been facing challenges in expanding its business scale at a level that is commensurate with the costs of introducing new aircraft, maintaining the operation and maintenance system, and training personnel engaged in operation and maintenance, in the highly volatile business environment of airfreight transportation.
“The continuous introduction of new aircraft to expand the operation and maintenance system, and the continuous training of personnel engaged in operation and maintenance required a considerable expenditure,” stated NYK, adding that “in the highly volatile business environment of airfreight transportation, NCA has been facing challenges in expanding its business scale at a level that is commensurate with such costs.”
Improvement in ANA’s Cargo Network
For ANA, this deal will significantly improve its international air cargo network and enhance its products and services based in Japan, aiming to contribute to the development of global economic activities both in Japan and abroad.
NYK further added that transferring shares of NCA to ANA is the best option for NCA to achieve further growth and increase corporate value from a long-term perspective that includes environmental responsiveness, as ANA operates the same business and has been providing NCA with a cooperative relation to strengthen its maintenance system.
The terms of the agreement are still under discussion, but both parties aim to finalize the deal by October 1. NCA currently operates a fleet of eight B747-8 freighter aircraft and owns five B747-400 freighters operated by ASL and Atlas Air.
NYK reported that its air cargo business had made a profit of Y56.4bn, and revenues increased 25.9% to Y178.3bn in the first nine months of the current business year, while NCA’s profitability has been patchy over the years, having reported losses in fiscal years 2012, 2013, 2018, and 2019.
NYK acquired all shares in NCA in 2010 with the aim of becoming a comprehensive logistics company offering ocean, land, and air transportation, after being involved in NCA since it was established in 1978.
Feature Image: Nippon Cargo Airlines JA18KZ Boeing 747-8KZF. Photo: Tony Bordelais/Airways