All Nippon Airways was back in the black with Japan Airlines not far behind as the travel recovery accelerated during the June quarter.
ANA posted a ¥1.1 billion ($8.3 million) net profit on ¥350 billion in revenues in the quarter, the airline reported Monday. JAL, on the other hand, posted a ¥19.5 billion net loss on ¥269 billion in revenues during the period. But the trend is clearly up.
Both airlines reported a pick up in passenger numbers, both domestically and internationally, as travel restrictions eased during the three months ending in June. This helped drive the recovery of ANA and JAL’s international flying as they continued to focus their schedules on connectivity between North America and Asia over their competing hubs at Tokyo’s Narita airport.
Air travel in Asia has been the slowest to rebound from the Covid-19 pandemic. In May, passenger traffic to, from, and in the region was down nearly 63 percent compared to 2019, according to the latest IATA data. For comparison, global airline passenger demand was down just 31 percent over the period. A big part of Asia’s lag is China’s continued zero-Covid policy that has kept the region’s largest market all but closed off to air travel.
But, at least for international travel, Asia is also setting the pace of recovery with passenger traffic up 453 percent in May compared to last year, the IATA data show. Countries including Indonesia, the Philippines, Singapore, and Thailand — all places where Japan is an ideal connecting point for travelers from North America — have seen strong rebounds as they have eased their restrictions.
IATA also noted that the passenger traffic recovery in Japan had “accelerated in May with easing travel restrictions and rising consumer confidence.” Domestic Japanese traffic stood at 73 percent of 2019 levels during the month.
ANA and JAL both cited the improvement in domestic demand along with an easing of travel restrictions in their results. The former forecasts domestic passenger numbers rising to 83 percent of pre-Covid levels in August from 69 percent in June.
ANA expects international passenger numbers to rise above 30 percent — to 32 percent of 2019 levels — for the first time since the pandemic began in July. International numbers were 29 percent of three years ago in June.
JAL, while it did not provide passenger traffic guidance, does anticipate positive earnings before interest and taxes (EBIT) for the first time since the pandemic began in July. In the June quarter, the carrier reported an EBIT loss of ¥27.5 billion. JAL maintained its forecast of ¥80 billion in positive EBIT, and a ¥45 billion net profit for the fiscal year ending in March 2023.
Both ANA and JAL reported strong results at their budget airline subsidiaries, as well as revenues above 2019 levels for their cargo operations during the June quarter.