Nippon Yusen Kaisha, a Japanese shipping company also known as NYK Line, announced Tuesday that it will sell Nippon Cargo Airlines to All Nippon Airways. The decision reverses the new trend of ship operators setting up their own cargo carriers.
Publicly traded company Nippon Yusen said it would exit the air cargo business because it was too expensive to run a profitable airline and grow to meet new demand. Owns and manages a Jumbo Freighter. Eight 747-8s flown alone, plus five older 747-400s operated by U.S.-based Atlas Airways (NASDAQ:AAWW) and two 747-400s boarded by his ASL Airlines It has been. Belgium.
In a news release, the company said, “The continuous introduction of new aircraft to expand the operation and maintenance system and the continuous training of personnel involved in operation and maintenance required a large amount of money.” “In the highly volatile business environment of air freight transportation, NCA faces the challenge of scaling its business to a level commensurate with such costs.”
The acquisition will enable All Nippon Airways, which operates 9 Boeing 767 medium widebody freighters and two large 777 freighters in addition to 225 passenger aircraft, to expand its international air cargo network and related products to attract more shippers. It helps us achieve our goal of supporting you better. ANA is a large airline and well suited to scale a much wider range of operations than NCA.
“For ANA, this transaction will dramatically strengthen our cargo sector. A range of aircraft types will complement our network needs. [allowing the 767s to focus on intra-Asia routes]said Michael White, a veteran air freight executive who now runs his own company, Trade Network Consultants. “Schedule, capacity and maintenance have synergies and should be worth the cost savings.”
ANA’s passenger network provides connectivity to shippers that freighters alone cannot serve, giving freighters the ability to create more precise services for heavy freight routes.
Last month’s updated corporate strategy helps explain ANA’s renewed interest in pursuing cargo opportunities. The document shows that airlines expect demand for cargo planes to increase in the medium term as airlines shrink the size of their passenger planes, leaving less room for cargo. We project yields to double pre-COVID levels.
ANA recently reported an estimated cargo revenue of ¥269 billion ($2 billion) for fiscal 2022. The 2025 plan calls for freight revenue of $1.9 billion, down 14% from this year’s budget as the market normalizes after the COVID crisis.
By comparison, Nippon Yusen said on Feb. 3 that NCA’s fiscal 2022 revenue will exceed $1.6 billion, down 2% from the previous year, but operating profit will fall 15% to $462 million. Estimated. Peak at the end of 22.
Nippon Yusen said it had not yet decided how its shares in Nippon Cargo Airlines would be transferred to ANA and the terms. As such, we expect to complete the transaction by October 1st.
The two companies have a long relationship. NCA was founded in 1978 by a group of his shareholders. Nippon Yusen bought a 27.6% stake in ANA in 2010 and took control of the company with the aim of becoming a comprehensive sea, land and air logistics company. In 2018, ANA started a business alliance with NCA, including code-sharing.
“They can integrate well with different types of aircraft to plan network capacity and revenue,” said Christos Spyrou, CEO and founder of central purchasing organization Neutral Air Partner. “Combining different aircraft and services is an advantage.”
Shipping company starts operations
NYK Line does not technically operate containerships as it placed assets in shipping line ONE in 2018, but it does operate a large fleet of car carriers and bulk carriers. It also owns a port terminal and a large logistics company.
A distinguishing aspect of NYK’s decision to offload NCA is that other carriers have invested heavily in airfreight and cargo logistics over the past two years. Nippon Yusen is going in the opposite direction to focus on its core business.
Maersk, the world’s second largest container line, has poured billions of dollars into becoming a full-service cargo airline that can offer a range of logistics options to its largest customers. Maersk, which has long operated freighters to provide outsourced airfreight to express carriers such as his UPS in the European market, plans to offer airfreight services directly to its own customers in the second half of 2021. decided.
Since then, it has acquired freight forwarder Senator International, ordered two 777 freighters from Boeing, purchased three production 767s, leased four modified 767 freighters, and acquired a fleet from Seoul, South Korea. Launched bi-weekly flights to South Carolina.
Another large container line, CMA CGM, established an air cargo operation in early 2022 and currently operates four Airbus A330s and two 777 freighters from Paris to the United States and Hong Kong.
The Mediterranean Shipping Company recently launched a new intercontinental cargo carrier with Atlas Airlines providing crew and maintenance.
All three carriers have also acquired multiple logistics service providers capable of supporting e-commerce fulfillment, last-mile delivery, warehousing, and freight management.
Meanwhile, China’s state-owned company COSCO Shipping has had an air logistics division since 1995 that books cargo with airlines. COSCO Shipping Air also owns part of China He Cargo Airlines. Last month, the company opened a logistics facility in the economic zone of Guangzhou airport, offering warehousing, e-commerce and temperature-controlled cargo handling, according to reports by The Loadstar and another trade publication.
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