Japan's two biggest airlines on Tuesday posted a significant recovery in profits in the April-September period as travel demand continued to pick up amid the removal of COVID-19 restrictions in the country.
ANA Holdings Inc. saw its group net profit more than quadruple from a year earlier to 93.21 billion yen ($620 million) in the six months, while Japan Airlines Co. posted a consolidated net profit of 61.67 billion yen, a record high for the first half since the company relisted on the Tokyo Stock Exchange in 2012.
Helped by an increase in both domestic and international travelers, ANA said its operating profit also more than quadrupled from a year earlier to 129.74 billion yen, a record high for the six-month period. Sales grew 26.8 percent to 1 trillion yen.
"Increased revenue in international flight operations and cost control contributed to a record profit," ANA President Koji Shibata told a press conference.
Japan in May downgraded the legal status of COVID-19 to the same category as seasonal influenza, prompting many people to travel domestically as well as abroad. Inbound tourists are also on the rise after the country greatly eased its border controls last fall.
The number of domestic flight passengers has recovered to about 90 percent of its pre-pandemic level of 2019, and that of international flight passengers has come to about 70 percent, ANA said.
While leaving unchanged its full-year earnings forecast on prospects of strong travel demand, ANA announced it will reduce a total of about 30 domestic and international flights per day from Jan. 10 to March 30 for engine inspections after U.S. engine maker Pratt & Whitney reported potential flaws in the manufacturing process.
The flight reductions, to affect services connecting Tokyo and Seoul, among others, will push down annual sales by 8 billion yen, the company said.
ANA said it projects a net profit of 80 billion yen on sales of 1.97 trillion yen for fiscal 2023.
JAL, meanwhile, returned to the black for the first time in four years in the April-September period, after logging a group net loss of 2.16 billion yen a year before. Sales increased 32.7 percent to 820.94 billion yen.
Reflecting the brisk demand, JAL raised its net profit forecast for the current fiscal year through March to 80 billion yen from an earlier estimate of 55 billion yen. Sales are now projected at 1.68 trillion yen, up from 1.66 trillion yen projected earlier.
"Although there are concerns over the oil and currency markets, we hope to maximize profits by lowering costs and tapping robust demand," Yuji Saito, chief financial officer at JAL, told reporters.
The airline expects oil prices to rise toward the end of the fiscal year amid the ongoing wars in the Middle East and Ukraine, while the weak yen has been hurting outbound travel demand from Japan, according to the company.
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