Japanese airlines' profits recover to pre-pandemic levels

Japan's two biggest airlines, All Nippon Airways and Japan Airlines, have seen strong rebounds from COVID-related setbacks in the first six months of their current financial years. Net profit for ANA in the April-September period improved 4.8 times over the same period last year to 93.2b yen ($618.6m), recovering to 2019 pre-COVID levels. Net profit for domestic rival JAL was 61.6b yen, returning to profit from a loss of 2.1b yen a year earlier. ANA recorded a 27% revenue rise of 1t yen, while JAL posted a 33% increase of 820.9b yen. Passenger revenue for JAL's full service flights was 589.4b yen, rebounding to levels last seen in 2019. ANA's was 681.5b yen, recovering to 96% of the 2019 level. One main reason for the strong results of Japan's two main airlines is the increase in the unit price of flights. Yield -- passenger revenue divided by passenger kilometers traveled -- increased 48% from four years ago on ANA's international flights and 51% on JAL's. "The supply-demand balance is tightening as the supply of international flights is lower than usual, with also high demand for flights to third countries via Japan. This has naturally led to higher passenger rates," said Kimihiro Nakahori, CFO of ANA Holdings, during a news conference on Tuesday. Whereas passenger volume on domestic flights has already recovered to approximately 90% of pre-pandemic levels, international flights are still hovering at 70% despite the soaring demand for inbound tourism. "Japanese people are still reluctant to travel abroad partly due to the persistent yen weakness," said Yuji Saito, JAL's CFO. There was a relatively high number of passengers on flights to Hawaii, South Korea and other destinations during Japan's Obon holiday in August. But overall outbound demand has been sluggish at around 50% of the 2019 level.<br/>