Japan Airlines (JAL) is banking on a travel resurgence to Southeast Asia and North America after it posted an operating loss of 239.4 billion yen ($1.83 billion) for the business year that ended on March 31.
The carrier expected an operating profit of 80 billion yen ($613.03 million) in the new business year, saying it expects passenger demand for international flights to recover to 45% of its pre-pandemic levels this business year.
The airline projected the number of flights to North America to return to pre-pandemic levels in the second half of the business year which began on April 1, and to the upper 80% range in the business year as total.
Last year, just 510,000 Japanese went abroad, according to government statistics, down from more than 20 million in 2019.
China Recovery Delayed
JAL is hoping for demand for Southeast Asia to be back to about 60% or 70%.
Recovery would be much slower for flights to mainland China and Hong Kong due to strict anti-pandemic measures, said Yuji Saito, JAL’s managing executive director.
In March, JAL cancelled flights to its European destinations over the risks from Russia’s invasion of Ukraine.
“As for the return of demand, I believe that we are now in the phase of a strong recovery,” said Japan Airlines president Yuji Akasaka.
Domestic Flight Demand
Passenger demand for domestic flights was expected to be around 90% of pre-pandemic levels for the current business year.
The remarks came the day after prime minister Fumio Kishida suggested Japan would review its border control measures in June.
The government is considering letting tourists from group tours in and increasing a daily arrivals cap to 20,000 from 10,000, the Nikkei business daily reported on Friday.
Rival ANA Holdings said last week it estimated a return to annual profit of 50 billion yen, facilitated by a strong domestic flight demand and easing in international travel restrictions.
Hawaii a Popular Destination
Hawaii is emerging as a popular destination as many Japanese look to head overseas for the first time in years now that fully vaccinated residents no longer face quarantine curbs on their return.
After encouraging demand for flights to Hawaii during a just concluded popular holiday season, JAL and ANA are hoping the outbound rise will help fill some of the gap from Japan’s ongoing ban on foreign tourist arrivals.
Japan on March 1 waived all quarantine and isolation requirements for triple-vaccinated residents returning from the US and a range of other countries. It also lowered its U.S. infection travel warning from April 1.
“The fact that you don’t have to quarantine upon return is a big reason why we chose Hawaii,” said Masahiro Sugiyama, who was travelling with his wife and two children.
- Reuters, with additional editing by George Russell
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