All Nippon Airways (ANA) Holdings has revealed some major investment moves, as it confirmed the purchase of a 9.5% strategic stake in Philippine Airlines (PAL) and placed an order for 38 narrowbody aircraft from Airbus and Boeing.

ANA’s 9.5% stake in PAL Holdings is valued at $95 million. The shares will be acquired from Trustmark Holdings Corp., which is PAL’s largest shareholder and is owned by the Lucio Tan family. The deal is “subject to certain closing conditions,” the carriers said. A PAL spokesman told ATW the carriers aim to close the deal in the first quarter of 2019.

ANA’s new aircraft order comprises 18 Airbus A320neos and 20 Boeing 737 MAX 8s. The neos are destined for its Peach Aviation LCC subsidiary. Deliveries will begin in fiscal year 2021, which begins April 1, 2021, and they will continue through FY2025.

The MAX 8s will replace ANA’s 737NGs, which are used on domestic routes, the airline said. ANA also secured 10 options for -8s.

ANA said the PAL investment signals its belief in “the dynamism of the Asian region and the great potential” of PAL. “We believe [PAL] is in an excellent operational position to capitalize on both the strong uptick in air traffic growth as well as the vibrant, expanding Philippine economy,” ANA Holdings CEO Shinya Katanozaka said. “We look forward to expanding our business relationship” with PAL. ANA plans to have one representative on the PAL board, an ANA spokeswoman said.

The two carriers already codeshare on Japan-Philippines and domestic routes. ANA operates 14 flights weekly on two routes to the Philippines, while PAL has 84 flights per week on nine routes to Japan. PAL serves Tokyo Narita and Haneda airports, as well as Japanese cities Osaka, Nagoya, Fukuoka and Sapporo. PAL also interlines with Japan Airlines, but they do not codeshare.

ANA and PAL will “sustain our current cooperation arrangements,” which comprise the codeshare agreement and frequent flyer links, the PAL spokesman said. “We will look forward to working on additional cooperation, and the deal gives us a good platform to explore future opportunities as ANA and PAL each bring strengths and expertise to the table,” the spokesman said.

ANA already takes care of PAL’s ground handling at Tokyo Haneda Airport, the ANA spokeswoman said. In the future, ANA plans to support PAL’s ground handling in other Japan gateways. ANA may also support PAL’s catering services at Haneda and Narita airports in the future.

As of Dec. 27, 2018, ANA had almost 60 737s, the carrier said in its latest fleet update. These comprised 40 737-800s, seven -700s and 10 -500s. The aircraft are operated by ANA and its ANA Wings subsidiary. ANA had no 737s on order prior to the latest announcement.

The parent airline also operated 27 Airbus narrowbody aircraft as of Dec. 27. ANA’s fleet includes A320ceos, A320neos, A321ceos and A321neos, with four A320neos and 12 A321neos still to be delivered, according to Aviation Week’s fleet database.

The 18 A320neos ordered for Peach will be used to replace existing aircraft in the LCC’s fleet. Peach already had orders for eight A320neos, with the first of these due in FY2020.

Peach said it has not decided on the engine type for the neo order. The aircraft will be configured with 188 seats.

Peach currently has 23 A320ceos in its fleet and has two A321LRs on order in addition to the A320neos.

ANA plans to merge its other LCC subsidiary Vanilla Air into Peach. Vanilla operates 15 A320s.  

Adrian Schofield, adrian.schofield@informa.com