JAL Group ups profit expectations in anticipation of strong demand

Japan’s JAL Group revised upwards its profitability expectations, based on its latest forecasts for both domestic and international demand. For its 2023 financial year ending 31 March, JAL expects earnings before interest and taxes (EBIT) to reach Y140b ($924m), up from its previous forecast of Y130b, according to a company strategy update. For its 2024 financial year, which runs from 1 April to 31 March 2025, the carrier forecasts EBIT of Y170b, increasing to Y200b, up from Y185b previously, for the 2025 financial year. The figures mark the group’s recovery from the coronavirus pandemic. In its 2019 financial year, its last profitable year before the pandemic, JAL Group generated EBIT of Y132b. For the coming 12 months, JAL indicates that the business environment will be characterised by high foreign exchange costs, a shortage of manpower in the aviation and tourism sectors, and increased environmental considerations with the implementation of ICAO’s market-based CORSIA carbon-offset and reduction scheme. As for the passenger market, inbound demand for travel to Japan should remain strong, although the recovery of outbound traffic will remain slow. Good e-commerce demand is also expected to boost cargo operations. More broadly, JAL foresees society continuing to emphasise the reduction of carbon emissions, as well as continued geopolitical risks.<br/>