Think tank: Few synergies between PAL, ANA

MANILA, Philippines – All Nippon Airways’ (ANA) possible entry in Philippine Airlines (PAL) will result in just a few synergies, think tank Center for Asia-Pacific Aviation (CAPA) said in its latest aviation analysis.

If ANA of Japan were interested to access the low-cost carrier market in the Philippines, CAPA said PAL would be a “complicated choice.”

“The possible synergies between ANA and PAL are few. PAL has contentiously exited the Philippines’ key low-cost segment and its long-haul ambitions will be challenging given the competition, its lack of geography or scale for connecting traffic, and a low profile without a global alliance or numerous partners,” it said.

It said ANA, which owns a minority stake in Peach and majority in AirAsia Japan, is still learning how to operate a dual brand strategy of a full-service carrier and low-cost carrier.

ANA has set its sights on PAL, which is looking for a buyer of the 51% interest of tycoon Lucio Tan. The other 49% of the legacy carrier is owned by San Miguel Corp. Earlier, San Miguel said it has had talks with ANA on a possible partnership in PAL.

ANA wants to invest in foreign airlines to secure new markets.

“Marriages are seldom consummated without a decent period of courting. ANA has quietly flirted with Indian carriers and is now whistling sweet tunes to PAL, which is looking for foreign airline investors,” CAPA said.

CAPA said the Philippines’ geography also poses a challenge for PAL and ANA. It said there are some efficient routings from Southeast Asia to Japan, but not from Southeast Asia to more inland points like China and Korea, which have greater growth prospects than Japan.

“Manila also is not positioned well geographically or from an infrastructure standpoint to attract a significant amount of transit traffic. All of the leading flag carriers from Asia and the Middle East now serve Manila and will make it difficult for PAL as the carrier tries to establish a presence in the Philippines-Western Europe market,” CAPA said.

PAL is looking to fly again to Europe by September or October following the European Union’s decision to lift a ban that prevented the carrier from mounting flights to the 28-nation bloc. – Rappler.com