TOKYO - All Nippon Airways plans to use part of the US$2.6 billion (S$3.29) billion) it is set to raise from equity markets this month to take stakes in or buy Asian rivals, underscoring the Japanese carrier's rush to secure growth outside its mature home market.

ANA said after the market closed on Tuesday that it would issue up to 211 billion yen worth of new shares to pay for fuel-efficient Boeing 787 Dreamliners, shore up its balance sheet and build up a war chest to invest in growth opportunities in Asia.

The carrier, which is grappling with a resurgent domestic rival in Japan Airlines and a sluggish outlook for air travel demand in Japan, indicated it would earmark a good portion of the funds for deal making offshore.

ANA said it wants to take large stakes in its targets that would give it a say in management. Potential deals include becoming a top shareholder in a full-service carrier and the outright purchase of a budget airline.

"We have no intention of taking small minority stakes in a number of different carriers, simply marking our territory," an ANA executive, who was not authorised to speak publicly about the matter, told Reuters. "Eventually we want to take majority stakes in airlines in different countries."

Many countries in Asia have regulations restricting ownership in their carriers. In those cases, ANA may look to take a smaller stake to start and build up its holding once the barrier to investment falls.

"For those countries where there are no barriers, we could go for it all at once," the executive said.

Whatever the target, ANA will need to act quickly to deliver returns on the new funds, which are equal to roughly 40 per cent of its market capitalisation in a significant dilution to its existing shareholder base.

ANA is moving to a holding company structure in April, which should make it easier to manage different brands.

"Without M&A this share offering has no meaning. There is a 40 per cent dilution and there needs to be good story around how they are going to generate returns," said Ryota Himeno, an airline analyst at Barclays in Tokyo.

Himeno said ANA would likely target low-cost carriers (LCC), rather than full-service ones. LCCs have growth potential, accounting for just 15 per cent of the Asia-Pacific market, compared to around 30 per cent in Europe and the United States, he said.

ANA already has a controlling stake in budget airline AirAsia Japan Co, which kicks off service in August. It also has a minority holding in Peach Aviation, another low-cost carrier that started flights in Japan earlier this year.

Paul Wan, an airline analyst at CLSA Asia-Pacific Markets, said he was wary of the risks to overseas deal making, noting that ANA has already forged operational ties with other members of the Star Alliance, one of three main airline networks globally.

"Given the existing code-sharing system and high execution risks overseas, synergies between ANA and other airlines overseas are limited," Wan said.