- POSTED: 30 Jul 2014 15:37
- UPDATED: 30 Jul 2014 15:50
Japan's All Nippon Airways (ANA) said on Wednesday it had swung back to profitability in the three months to June, thanks to an expansion at a Tokyo airport and a change to its pension plan.
TOKYO: Japan's All Nippon Airways (ANA) said on Wednesday (July 30) it had swung back to profitability in the three months to June, thanks to an expansion at a Tokyo airport and a change to its pension plan.
The carrier said net profit was 3.5 billion yen ($34 million) against a loss of 6.6 billion yen a year earlier, while quarterly sales rose 10.0 percent to 386.8 billion yen. It also logged an operating profit of 347 million yen, from an operating loss of 5.6 billion a year ago.
The sharp improvement came as ANA expanded its international services, benefiting from a major expansion of Tokyo's downtown Haneda Airport, which helped offset a jump in operating expenses mainly due to higher fuel costs.
The firm also booked a 9.9 billion yen extraordinary gain as it changed the structure of its corporate pension scheme, ANA said.
The firm's sales growth was supported by solid demand for domestic and international air travel. Like Japan Airlines, ANA said its overseas business saw strong demand, while flights to Japan rose steadily as the country logs record tourist arrivals. The firm benefited from Haneda's increased capacity to handle international flights, with ANA adding services to major cities such as London, Paris and Hanoi.
"ANA continues to strengthen its network, taking advantage of the expansion of international slots at Haneda Airport from this March," it said
The airline left unchanged its forecast for the fiscal year through March, expecting a 35 billion yen net profit, an operating profit of 85 billion yen, and 1.7 trillion yen in annual sales.
On Tuesday, Japan Airlines said its April-June net profit fell 19.4 per cent to $145 million, after repeatedly warning about the steadily rising cost of fuel, often a carrier's single-biggest expense. A weaker yen inflates the cost of dollar-priced commodities such as jet fuel.
"It looks like ANA and JAL's earnings will be okay in the next quarter. But for the rest of the year, we have to wait and see what the impact of domestic fare prices increases will be after the summer," said Ryota Himeno, analyst at Barclays Securities Japan. "They're facing intense competition from other modes of transportation, such as the bullet train."
ANA and JAL are increasing their use of the lighter weight Boeing Dreamliner to contain costs, but the fuel-efficient aircraft has been hit by a series of technical problems that forced a months-long grounding last year.
However, the two airlines have stood by Dreamliner, with ANA slated to become the world's first airline to operate the new stretched version of the plane in August.