NYK Line has agreed to transfer its holding in Nippon Cargo Airlines (NCA) to Japanese airline ANA Holdings.
The international air cargo business was jointly established by NYK, Mitsui OSK Lines, Yamashita Kisen and K Line in 1978, but became a wholly owned NYK subsidiary in 2010.
Ownership of an airline marked the liner company out as a more diversified and comprehensive transportation business than its domestic competitors.
However, according to local sources, at times in its history, NCA has run up losses and been a financial drain on its parent, although in the latest financial year it recorded a profit.
NYK said the high cost of the operation was a factor in deciding to offload the company.
“… 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,” it 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.”
NYK said it was approached by ANA to acquire the company, and that under the new ownership NCA would have more opportunities to develop and expand.
No value has been given for the transfer of shares. NYK said it had come to a “basic agreement” with ANA and the deal would be completed in a “single transaction”.
The acquisition terms would be agreed in discussions with ANA. The two companies have set a 1 October 2023 date to complete the deal.
Analysts suggest that the sale will lead to a management refocus on NYK’s core shipping and logistics business.
The acquisition of NCA was part of NYK’s business plan to become a comprehensive land, air and sea transportation company. The disposal marks a decisive change in that strategy.
The liner will now focus its capital expenditure plans on decarbonising its fleet and growing in offshore renewable services.
