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TOKYO (Reuters) – ANA Holdings and Japan Airline (JAL) maintained their positive profit outlook for the year on Monday as airlines saw a strong recovery in demand as they grappled with demanding COVID-19 situations and high fuel prices.
A resurgence of the virus in Japan has slowed domestic flight bookings, but points such as strong demand for foreign flights remain positive, ANA and JAL executives said.
Both airlines maintained their outlook for the year as of March 31, 2023.
“Domestic passenger traffic is expected to be lower than expected for the full year in the current quarter,” said ANA Group Chief Financial Officer Kimihiro Nakahori. “But foreign passengers exceed expectations of profits for the whole year” and freight transport is acting strongly, he added. .
Demand for domestic flights is very likely to weaken as instances of COVID-19 due to the BA. 5 variant, which took domestic instances to a record 233,094 last week.
For July and August, ANA Holdings’ subsidiaries, All Nippon Airways, and cheap airline Peach Aviation estimated that their number of passengers on domestic flights would be about 80% of pre-pandemic levels.
ANA expects the number of passengers on its flights to exceed 30% of pre-pandemic levels.
The backlog of COVID cases, the Ukraine crisis, and emerging fuel costs are points of threat that JAL wants to pay attention to,” said Hideki Kikuyama, executive director.
Both airlines posted declining operating losses in the first quarter.
ANA Holdings posted an operating loss of 1. 3 billion yen ($9. 8 million) in the first quarter versus a loss of 64. 6 billion a year earlier.
JAL posted an operating loss of 30. 2 billion yen for the April-June quarter versus a loss of 76. 8 billion a year earlier.
Both airlines attributed strong demand for transit passengers, and JAL reported that the number of passengers on its transit flights accounted for 33% of all passengers on foreign flights in the April-June quarter, more than quadruple that in the same period before the pandemic. .
“It’s to meet this kind of demand,” Kikuyama said.
Japan began a slow reopening to tourists in June after being closed to non-residents for more than two years as part of pandemic-related measures.
However, the government limits the number of entries to another 20,000 people per day, adding returning citizens, a fraction of pre-pandemic levels, and tourists can only arrange trips.
Ana’s Nakahori and JAL’s Kikuyama called on the government to further ease access restrictions and allow individual tourists into the country.
($1 = 132. 5700 yen)
(Reporting via Satoshi Sugiyama; editing via Tom Hogue and Jason Neely)