Strong domestic and international demand after the relaxation of travel restrictions in Japan have helped All Nippon Airways (ANA) to produce a first-quarter profit. This is the first Q1 profit in four years for the Japanese carrier, which already returned to profitability in 2022.
ANA reported a net profit of ¥30.6 billion for the April-June quarter compared to ¥1.0 billion in the same period of last year. Revenues increased to ¥461 billion from ¥350.4 billion, mainly the result of ramping up capacity on the international network. Expenses totaled ¥417.2 billion versus ¥351.7 billion. This resulted in a much-improved operating profit of ¥43.7 billion compared to a ¥-1.3 billion loss last year. Operating cash flow was up 20.4 percent to ¥139.4 billion.
All Nippon carried 1.6 million passengers on international flights, up from 684K in HY1 last year, at a 77.2 percent load factor. Inbound traffic was strong from North America and Europe but also on connecting flights between North America and China, which reopened for international visitors earlier this year. Capacity as in available seat kilometers increased 102.4 percent to 12.5 million. ASKs were outperformed by RPKs (revenue passenger kilometers) to North America and Europe. ANA generated ¥167.3 billion in international revenues, up from ¥62.2 billion last year.
Leisure traffic in Japan is back at 2019 levels, in part thanks to a sales campaign to celebrate the 70th anniversary of the airline, but business travel is still below pre-pandemic levels. ANA flew 9.7 million passengers on domestic services, up from 6.6 million in Q1 of FY22, reaching a load factor of 66.9 percent. Capacity grew 21.1 percent to 13.4 million. Revenues increased to ¥142.5 billion from ¥102 billion.
Golden Week benefits Peach
Low-cost subsidiary Peach, which celebrated its tenth anniversary on March 1, also recovered and carried 2.2 million passengers on its domestic and international routes, including China. This was up from 1.7 million in the same quarter last year. Demand was particularly strong during the Golden Week spring holidays in April/May. The LCC produced ¥27.7 billion in revenues, up from ¥15.5 billion. Capacity in ASKs was 9.9 percent higher to 3.2 million.
ANA Cargo was confronted with eighty percent lower volumes, notably on international routes to North America and China and within Asia. Demand for semiconductors and automotive parts dropped significantly year on year. Freight carried on international flights was 171K tonnes compared to 215K the year before, resulting in revenues of ¥38.1 billion compared to ¥94.7 billion last year. Unit prices were still 1.8 times higher compared to 2022. Domestic cargo was just one tonne down to 58K, with revenues down to ¥5.2 billion from ¥5.9 billion.
Earlier this quarter, ANA announced a final agreement to take over cargo operator NCA from Nippon Yusen Kabushiki Kaisha and acquire all shares via an exchange. This is expected to take effect on October 1. NCA operates a fleet of eight Boeing 747-8Fs.
ANA maintains its consolidated full-year financial guidance as released in April, which includes operating revenues of ¥1.970 billion and an operating income of ¥140 billion. Medium-term, ANA has set aggressive targets for FY25. The airline has hedged thirty percent of fuel costs and 25 percent of currency costs this year. The aircraft fleet number has been unchanged since March 31 and stands at 276 as two Airbus A320neos were delivered and two A320ceo’s retired.
