Japan's Airlines Divided on Future of International Airfares

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Japan's Airlines Divided on Future of International Airfares

Japan's two leading airlines, ANA and JAL, face uncertainty regarding the future of international airfares, which have seen significant increases due to high energy prices. ANA Holdings, the parent company of ANA, predicts a decline in fares, while JAL anticipates sustained high levels.

In the October-December period, both airlines experienced substantial increases in average passenger revenue compared to pre-pandemic levels, driven by fuel surcharges and recovering air travel demand.

ANA's executive vice president, Kimihiro Nakahori, suggests that airlines may maintain higher airfares compared to pre-pandemic years in the short term, but expects a gradual return to normalcy over time.

In contrast, JAL's senior managing executive officer, Yuji Saito, believes that airfares will remain elevated due to global inflation and a modest pace of flight increases to and from Japan.

Both airlines acknowledge the importance of international operations, which generate higher revenue per passenger, in bolstering their financial performance. ANA projects a record operating profit, while JAL's net profit has surpassed pre-pandemic levels for the April-December period.

However, both airlines anticipate subdued demand for international air travel, with factors such as limited Chinese group tours to Japan and the weak yen discouraging outbound travel from Japan. JAL's Saito emphasizes Japan's exceptional status in the global market regarding outbound travel demand recovery.