Shipping and logistics group NYK and airline All Nippon Airways (ANA) have entered into a definitive agreement on the transfer of all shares in B747 freighter operator Nippon Cargo Airlines (NCA).
The share transfer is due to take place on October 1 following approval of NCA's shareholders and will see ANA become a wholly owning parent company and NCA become a wholly-owned subsidiary.
The two signed a basic agreement on the deal in March.
"ANA, in order to dramatically enhance its international air cargo network and products and services based in Japan and also with the aim of contributing to the development of global economic activities both in Japan and abroad, expressed its strong desire to add NCA - the only Japanese airline dedicated exclusively to air cargo transportation - to its business portfolio and integrate and reorganise NCA within the cargo business of the ANA group in the future, thereby realizing the goal of providing high-quality and internationally competitive air cargo transportation services that can respond to the increasing sophistication of the supply chain," a stock exchange announcement read.
NYK said that NCA would be better positioned to grow further within an airline group, which would also in a better position to support NCA with emissions reduction requirements.
"The continual introduction of new aircraft to expand the operation and maintenance system, as well as the continual training of personnel engaged in operation and maintenance required considerable expenditures," NYK said.
"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."
NCA currently operates a fleet of eight B747-8 freighter aircraft and owns five B747-400 freighters that are operated by ASL and Atlas Air.
The airline decided to concentrate on the B747-8F after a maintenance issue forced the company to temporarily ground its fleet back in 2018.
It also faced a government maintenance warning earlier this year.
In the first nine months of the current business year, NYK reported that its air cargo business had made a profit of Y56.4bn – flat on a year earlier – and revenues increased 25.9% to Y178.3bn.
However, NCA’s profitability has been patchy over the years, having reported losses in fiscal years 2012, 2013, 2018 and 2019.
NYK said it had been involved in NCA since it was established in 1978 and acquired all shares in the freighter operator in 2010 with the aim of becoming “a comprehensive logistics company offering ocean, land, and air transportation”.
Management changes
At the same time the update on the sale of NCA was announced, a series of management changes were also unveiled.
Hitoshi Oshika, who is currently president and chief executive, will become chairman of the board.
And Hiroyuki Homma has been promoted to president and chief executive from his current role as senior managing director.
