Marriage for Mutual Progress

Asiana, ANA sign equity partnership to expand cooperation overseas

Asiana Airlines and All Nippon Airways (ANA) have agreed to cooperate with each other in many aviation fields including the purchase of each other's stake and joint operation of air routes and purchasing fuel and repairs parts, Asiana Airlines said on May 30.
Under the joint equity partnership agreement signed on May 30 at Mayfield Hotel in downtown Seoul, the two airlines will launch the code-sharing operation of their Tokyo-Honolulu route from July 1 and promote the code-sharing operation of the triangle route linking Gimpo, Haneda and Hongchao, Shanghai, as a mid-to-long term cooperative project.
The two air carriers have been sharing services for 154 flights between Korea and Japan from February. Under the new agreement, the two airlines will expand their cooperation to overseas operations including joint ground services at 19 foreign airports to cut costs and improvement in ground services. They also agreed to extend cooperation during emergencies.
President Kang Joo-an of Asiana Airlines and his counterpart at ANA, Mineo Yamamoto, agreed that the tie-up is designed to further strengthen the two carriers'cooperation at a joint interview following the signing.
President Kang said the amount of capital to be invested by each other's airlines is not much, totaling only $12 million each. But it is nonetheless very significant in terms of strategic alliance. Neither of us would like to participate in the management of each other's operations nor have intentions to make a bigger investment in the future.
But they will boost the cooperation between them on a wide-ranging area of the operations including marketing, airport services, flight supports, purchasing, in-flight services and manpower to name just a few, they said.
With $12 million, Asiana will be able to buy 3.16 million shares of ANA or 0.16 percent and ANA will be able to acquire 1.26 million shares of Asiana or 0.72 percent. The significance of the move is that the two air carriers will be able to expand their tie-up as strategic partners.
In the area of cargo transportation, the two air carriers have already been undertaking a code-sharing operation between Korea and Japan. In addition, Asiana is considering providing part of its cargo flights between Korea and the United States to ANA.
Starting July 1, they will launch a code-sharing operation between Narita and Honolulu. They are also linking services in the triangle shuttle air route linking Gimpo, Narita and Hongchao, Shanghai, which is likely to be established soon. Chinese Premier Wen Jiabao and Korean President Roh Moo-hyun agreed to open the shuttle air route between Gimpo and Hongchao as early as possible when Wen visited Seoul in April.
The two airlines also are considering ways to sell air tickets jointly to large corporations in Korea and Japan. They also plan to setting up joint ground services at 19 foreign airports to improve the services and joint efforts in the event of emergencies at those airports. Also included in the agreement is the exchange of parts under joint ground services at Los Angeles airports, joint purchasing of fuel and the exchange of in-flight personnel and programs. The two airlines will also consider the exchange of manpower training programs.
They also said they don't have plans to conclude similar agreements with other airlines affiliated with the Star Alliance, which has 18 airlines as members. It will increase to 20 by the end of this year, when Air China and Shanghai Airlines join it.
The two partner airlines said the equity partnership among airlines is rare, which could be the first one in the industry and it would have no effect on their affiliates.
ANA President Yamamoto said there is a cultural difference between Korea and Japan and it would be an advantage in creating new services based on the differences. The equity partnership agreement is the first one in the airline industry around the world; he said which would help the exchange of personnel and material. The equity partnership is very important in symbolic terms, not the scale of investment and he wants to show the world the special relationship between airlines from different countries and what it can do in developing new airline products in the future. nw

President Kang Joo-an of Asiana Airlines, 4th R, shakes hands with President Mineo Yamamoto of All Nippon Airways, after signing the Equity Partnership Agreement in Seoul May 30.

Chairman Park Sam-koo of the Kumho-Asiana Group.