LONDON – After two years of demise, Japan’s national carrier Japan Airlines is rebounding once again after losses. The airline witnessed its fleets fall to 2014 levels.
The Japanese carrier recorded a group net loss for the second year in a row due to the never-ending pandemic. Its executive nevertheless is signalling that the airline is heading out of the woods as demand recovers.
Financials Show strong recovering in compared to recent year
For the past calendar year to 31st March of this year, the airline logged an operating loss of Y235 billion ($1.8 billion), a significant improvement from the Y390 billion loss posted last year.
Adjusting from the baseline, the airline witnessed revenue rise by approximately 41% to Y683 billion, due to a doubling of revenue from the international passengers. The Japanese carrier acknowledges that border restrictions in Japan are hampering potential growth, but in light of the relaxation of border controls in Europe and North America, parts of Asia are a crucial parcel of recovery for the airline.
International bookings doubled year-on-year, but were down 87% against pre-covid numbers, while capacity was higher at 91% higher year-on-year but down 58% against pre-covid levels.
Domestic passenger revenues, on the other hand, rose approximately 35% year-on-year, JAL stated that demand has fluctuated erratically in lieu of the inconsistencies with the covid-19 measures announced in Japan.
Domestic traffic and capacity grew 30% and 26% but were down 56% and 32% against pre-covid levels.
Unsurprisingly cargo revenue tripled against pre-pandemic levels, with cargo columns more than 30%, higher than the 2019 fiscal year.
JAL Forecasts strong profits by year-end
In its forecast, JAL executives predict that the airline is expected to make a modest profit of Y45 billion by the end of next year the 1Q2023. The airline aims to have a full domestic recovery by the end of the year.
JAL’s new fleet plays an important role in the recovery of the airline. The newly acquired Airbus A350 arrived at Tokyo Haneda in mid-February of last year. The airline so far has received seven A350s during the fiscal year of 2019. The carrier ordered 31 A350s in 2013 to replace its ageing Boeing 777s.
The market price of the A350s racked up 1 trillion yen in total. Despite the high price, the airline hasn’t deviated from its investment plan despite the pandemic. These investments are crucial in the airline’s revival game.
Hideki Kikuyama, JAL’s Chief Financial Officer stated that “Right now, we are elevating our competitive advantage, and [the benefit] will definitely emerge when demand recovers. “. “The real game starts now.”
Japan eased its domestic pandemic measures in March as infections ebbed. This allowed demand to surge significantly. The Japanese government is relaxing its entry rules by June 2022, a move welcomed by JAL and other Japanese carriers.