Logistics specialist NYK has entered into an agreement to transfer all shares in Boeing 747 freighter operator Nippon Cargo Airlines (NCA) to Japanese carrier All Nippon Airways Holdings.
The shipping group cites the ongoing cost of running the cargo airline for the decision. The terms of the deal are still under discussion but both parties hope to finalise the transaction by October.
“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,” NCA says. “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.”
For ANA, the deal will “dramatically enhance its international air cargo network” and products and services based in Japan and also with the aim to contribute to the development of global economic activities both in Japan and abroad.
“In order for NCA to achieve further growth and increase corporate value from a long-term perspective which includes environmental responsiveness, we believe that it is the best option to transfer shares of NCA to [ANA] which operates the same business, and has been providing NCA with cooperative relation to strengthen its maintenance system,” NYK adds.
NCA currently operates a fleet of eight 747-8 freighters and owns five 747-400 freighters that are operated by ASL and Atlas Air.
The airline decided to concentrate on the 747-8F 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 Y56.4 billion ($415 million) – flat on a year earlier – and revenues increased by a quarter to Y178.3 billion.
However, NCA’s profitability has been patchy over the years, having reported losses in fiscal years 2012, 2013, 2018 and 2019.
NYK has 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”.