Japan’s All Nippon Airways (ANA) has dropped its plan to buy a 49 per cent stake in Myanmar airline, Asian Wings Airways, blaming “intensified” competition in the country as it quickly emerges from years of economic isolation. Asian Wings operates an A321-100 and three ATR72-500s on scheduled flights throughout Myanmar, as well as to neighbouring Thailand.

“Competition between new and old airlines in Myanmar has intensified, bringing rapid changes in the external environment, and calling into question the assumptions made at the time of the original decision. Ultimately, negotiations for the capital participation with Asian Wings Airways were unable to reach an agreement, and the investment plan was canceled as a result,” ANA said in a statement. ANA’s Board of Directors first decided to acquire the 49 per cent stake in August 2013 for US$25 million. The funds were sourced from the Japanese carrier’s successful IPO in 2012 which raised US$1.8 billion.

The announcement came as the Japanese carrier said it had swung back to profitability in the three months to June.
With little room for growth in the domestic market, ANA and other Japanese firms have been eyeing Southeast Asia as an increasingly lucrative market.