All Nippon Airways (ANA) achieved a healthy improvement in profits for the six months through September, as the airline’s rapid expansion in international markets provided a significant boost in revenue.
The carrier’s parent, ANA Holdings, reported a net profit of ¥35.7 billion ($327.3 million) for its fiscal first half, up 78.2% from a profit of ¥20 billion in the year-ago period. Operating revenue increased 9.1% to ¥854.8 billion, largely due to ANA’s international growth strategy.
With a mature and stable domestic market, Japanese airlines have been focusing their attention on long-haul markets. This has been aided by increasing inbound demand, driven in part by government policies aimed at encouraging visitors. New slot awards have enabled ANA to build an international hub at the Tokyo’s Haneda airport, which was previously used mostly for domestic flights.
Helped by the new Haneda services in its summer schedule, ANA’s international capacity increased 22.5% in the six-month period. However, traffic grew slightly more slowly at 19.5%, resulting in international load factor slipping 1.9 points to 72.9%. International revenue was up 20%.
In contrast, domestic capacity was down 1.6%, with load factor rising 2.1 points to 63%. The 74.7% load factor for ANA’s low-cost carrier subsidiary Vanilla Air was significantly higher than the mainline operation. The cargo sector showed healthy rise in volumes and revenue in both domestic and international markets.
As well as the growing contribution from international routes, the steady improvement of the Japanese economy was also highlighted by ANA. The carrier is optimistic about the economic outlook, and it expects the gradual recovery to continue through the second half of the fiscal year through March 2015.
ANA said it is adhering to its previous guidance for the full fiscal year, issued in April. It expects net income to rise to ¥35 billion, compared to 18.8 billion in the previous year. The carrier forecasts operating revenue will be ¥1.7 trillion, a year-on-year increase of nearly ¥100 billion.