ANA posts small net profit, reversing loss

AFP-JIJI

All Nippon Airways on Friday posted a quarterly net profit of ¥668 million, reversing a year-earlier loss thanks to increased travel demand.

ANA’s sales rose 12.5 percent in the first quarter of the 2012 business year from a year earlier to ¥343.19 billion as the economy continued its recovery from the 2011 earthquake and tsunami disaster, while the stronger yen made overseas trips cheaper.

In April-June of last year, ANA logged a group operating loss of ¥8.1 billion amid tumbling passenger numbers in the aftermath of the March 11 disasters and Fukushima nuclear crisis.

Cost cuts and a recovery in international travel demand helped the nation’s second-largest airline post a record operating profit of ¥11.1 billion in the fiscal year that ended in March.

ANA said international flight sales rose more than 20 percent on year in the latest quarter.

While the surging value of the yen has hurt manufacturers, it has had a positive effect on airlines as Japanese tourists’ spending power increases.

“Travel demand for international passengers as well as visits to Japan, which were badly damaged by the disaster last year, steadily recovered,” the company said in a statement.

Domestic flight revenue rose nearly 11 percent, it said.

But the airline also warned it is “facing a number of headwinds in the shape of a slowing world economy, the growing government debt crisis in Europe and increased competition”.

ANA said “the start of full-scale operations by low-cost carriers in Japan” means rising competition in the aviation industry.

Japan’s aviation market has long been dominated by ANA and Japan Airlines, but this year has seen the launch of a number of new cheap carriers that could challenge that supremacy.

Both airlines have invested in the new budget startups.

ANA last year set up Peach Aviation with a Hong Kong investment fund, while JAL announced a tieup with Australia’s Qantas to launch Jetstar Japan.

AirAsia Japan — a joint venture between ANA and Malaysia’s budget firm AirAsia — has also launched lower-cost service.

ANA, which late last year became the first airline to fly Boeing’s new 787 Dreamliner, said it sees a host of other challenges for the year to next March, including rising oil prices and exchange rate fluctuations.