All Nippon Airways Co. may sell more than half of its hotel business to InterContinental Hotels Group PLC of Britain, ANA sources said Wednesday.

The move to sell a controlling stake in ANA Hotels & Resorts Co. effectively amounts to handing over the group’s hotel operations to the British chain, which runs Holiday Inn Hotels and Crowne Plaza Resort Hotels, the sources said.

The tieup would help ANA reduce responsibility for its biggest noncore business, although it plans to keep the exclusive ANA Hotel brand, the sources said.

ANA runs a domestic network of 33 hotels and two overseas.

ANA is looking to form business and capital tieups with InterContinental, and the two are considering converting some of ANA’s hotels in Japan into combined brands, such as ANA Crowne Plaza and ANA Holiday Inn, they said.

The two hotel chains expect to profit from the synergistic effects of their brands, since ANA Hotel is a high-profile domestic brand and InterContinental is an internationally recognized name, the sources said.

The ANA group’s hotel operations returned to the black on an operating profit basis only in the business year to March 31 after bleeding red ink for four years in a row.

But ANA’s top managers now think it would be wiser to improve itself by teaming up with professionals in the hotel industry like InterContinental, in light of the increasingly intense competition from other hotels, including foreign rivals that have set up in Tokyo in recent years, they said.

ANA needs to secure capital to push investments related to its mainline aviation business to cash in on Haneda airport’s plan to add a new runway in 2009. The airline is thus considering selling the land its hotels stand on to raise hard currency, they said.

InterContinental wants to bolster its brand recognition on the Japanese market by tying with ANA and also eyes a part in the operations of the its resort hotels in Okinawa, they added.

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