The Japan Airlines (JAL) Group has announced impressive consolidated financial results for the third quarter of the fiscal year ending March 2025. This covers the period from 1 April 2024 to 31 December 2024.
Overall, JAL Group demonstrated robust growth in revenue and profitability. This was driven by strong international passenger demand, and a resurgence in domestic travel.
A strategic expansion in its low-cost carrier (LCC) Zipair further added to the results.
Financial Highlights: A Positive Trajectory
JAL Group’s third-quarter revenue reached JPY 1,385.9 billion, a substantial 10.9% increase year-on-year. Operating expenses also rose by 11.0% to JPY 1,253.7 billion. The rise is attributed to increased fuel costs influenced by the weaker yen, and investments in human capital. However, the airline Group effectively offset these challenges with its strong revenue performance.
This resulted in an impressive EBIT (Earnings Before Interest and Taxes) of JPY 144.2 billion, an 11.9% year-on-year increase.
Net profit also saw positive growth, reaching JPY 91.0 billion, a 6.0% year-on-year improvement.
Business Segment Performance: Growth Across the Board
All business segments contributed to JAL’s strong performance. Full-service carriers, LCCs, and non-aviation businesses, including Mileage/Finance and Commerce, all reported increased revenues compared to the previous year.
Notably, the non-aviation sector achieved its highest profit for a single quarter since the company’s re-listing, driven by successful business model reforms.
Full-Service Carrier Business: Riding the Wave of Demand
The full-service carrier business generated JPY 1,095.4 billion in revenue, an 8.7% year-on-year increase.
This growth was fueled by robust international passenger demand, a recovery in domestic passenger numbers thanks to targeted promotional campaigns, and strategic acquisition of high-value cargo using freighters.
Despite increased investment in human capital for future expansion, the strong revenue performance helped mitigate the impact. This resulted in a modest 3.9% year-on-year decrease in EBIT to JPY 98.6 billion.
International Passenger Travel: A Resounding Return
International passenger traffic experienced a significant surge, with a 12.2% increase in passenger numbers and a 9.9% increase in revenue year-on-year.
This was driven by continued strong inbound tourism to Japan and the gradual recovery of outbound business travel.
Domestic Passenger Travel: Further Success
JAL’s domestic passenger business also saw positive results, with a 5.4% increase in passenger numbers during the third quarter alone, thanks to a series of successful promotional campaigns.
The revenue passenger load factor reached a record high of 82.9%, contributing to a 2.7% increase in cumulative revenue for the third quarter year-on-year.
Cargo and Mail
JAL strategically focused on capturing high-value international cargo, such as pharmaceuticals and shipments from China and Asia to the U.S.
This resulted in significantly higher revenue compared to the previous year, driven by increased transport weight and unit prices.
Low-Cost Carrier: A Sevenfold Increase in Profit
The LCC segment demonstrated exceptional growth, with revenue increasing by 43.2% year-on-year to JPY 77.3 billion. EBIT saw a remarkable sevenfold increase year-on-year, reaching JPY 8.5 billion.
Subsidiary airline ZIPAIR continued its strong performance, successfully capturing robust inbound demand on nine routes, primarily in North America and Asia.
In October 2024, ZIPAIR was selected as a “4-Star Airline (LCC category)” by APEX, an international airline rating organization.
Strategic Initiatives: Investing in the Future
JAL has made several strategic moves to strengthen its position and prepare for future growth:
Fleet Modernization: The delivery of the eighth Airbus A350-1000 aircraft, now operating on the Haneda-London route and soon to be introduced on the Haneda-Paris and Haneda-Los Angeles routes.
Targeting Younger Travelers: The introduction of the “JAL Card Skymate” fare, offering additional discounts for passengers aged 12 to 25, alongside other initiatives to stimulate demand among younger demographics.
Expanding Cargo Operations: The addition of a third 767-300BCF freighter, enhancing the international cargo transport network. New initiatives, such as expanding the partnership with Qatar Airways Cargo and becoming a certified inspection agency for export plant quarantine, signal JAL’s commitment to this sector. Domestic cargo operations also continue to expand with Yamato Holdings.
Strengthening Partnerships: New codeshare agreements with IndiGo (India’s largest airline) and a planned joint business with Garuda Indonesia (starting spring 2025) will expand JAL’s global reach.
Strategic Sponsorships: The partnership with Major League Baseball (MLB) as an official sponsor will promote travel between Japan and the U.S.
Summary
JAL Group’s strong third-quarter performance demonstrates its resilience and adaptability in a dynamic market. By focusing on strategic initiatives, expanding its network, and capitalizing on market opportunities, JAL is well-positioned for continued success this year.
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