Addendum
All Nippon Airways reports record profit as Japan Airlines falters
May 1st 2017
Japan’s All Nippon Airways (ANA) reported a record net profit of 98.83 billion yen (US$890 million) for its latest fiscal year as a result of cheaper fuel and an effective cost reduction program. Read More » ANA said for the year to March 31, consolidated net profit increased by 26.4% over the previous 12 months.
Group operating profit rose 6.7%, also a record high, but sales declined 1.4% from lower surcharge revenue and a stronger local currency.
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Mainline passengers increased 2.5%, to 52 million. The airline carried 9.12 million passengers on its international services, an increase of 11.6%, due to “brisk business flight bookings and solid demand from passengers flying to the U.S. from within Asia via Japan”.
The airline said: “the overall aviation market environment during the year remained robust supported by a gradual recovery in domestic and overseas economies improved corporate profitability, a better employment environment and higher levels of personal consumption”. The carrier forecast increased revenue and profits for the 2017-2018 year.
“In the full service carrier business, which is the mainstay of the group’s profitability, ANA HOLDINGS has worked to maintain profits on domestic routes,” it said. “ANA will expand and improve its international network with the sustained development of its dual-hub for the Tokyo metropolitan region. It will also maintain its brand recognition campaign globally and boost its sales capacity.”
The group has a target of increasing international passenger and cargo revenues by 40% by 2020 and has revised upwards, by 10 fold, its growth projections for LCCs.
It also will increase its fleet from 268 aircraft at present to 335 by 2020; which is 35 more aircraft than announced in previous strategy update from the group. The airline has maintained its forecast of an operating income target of 200 billion yen in 2020 and predicted it would achieve a net profit of 125 billion yen in the current fiscal year to March 2018.
Japan Airlines (JAL) announced less favourable results than its energetic rival, with a 5.9% year-on-year fall in profit to 164.17 billion yen. JAL attributed the result to reduced fuel surcharges, a decline in international passengers and an appreciation of the yen.
The airline carried 8.4 million passengers for the year, a drop of 0.8% over the previous 12 months. Domestic passenger revenue also declined, by 0.5%, in part because of powerful earthquakes in southern western Japan.
JAL is forecasting a consolidated net profit of 100 billion yen for the current fiscal year, a decline of 39.1%, over last year but sales are expected to increase by 3.9%.
