Japan’s ANA rebounds from Covid-19 with first annual profit since 2020

BLOOMBERG

ANA Holdings Inc reported operating income of 120 billion yen ($897 million) for the  full year through March, its first annual profit since the 12 months ended on March 2020 thanks to a rebound in travel demand.
Japan’s biggest airline also gave a better-than-expected forecast for the coming year, saying operating profit should rise to 140 billion yen, compared with analysts’ estimates of 136 billion yen.
Travel demand from North America, Oceania and most of Asia has improved since Japan started easing Covid-related restrictions in September, but the recovery from Europe and China still lags, Chief Executive Officer Koji Shibata said at a briefing in Tokyo.
Demand from Chinese tourists in summer will “have further effect on our earnings,” he said. ANA has announced plans to increase weekly flights between Japan and China by around 50% by June.
Separately, the Association of Asia Pacific Airlines (AAPA) said that international passenger numbers in the region jumped 495% from a year earlier to almost 20 million in March, back to 61% of pre-pandemic levels. “Demand continues to be robust as remaining travel restrictions are lifted,” AAPA Director General Subhas Menon said in a statement.
“Asia Pacific carriers expect to see strong revenue growth this year even though increasing cost pressures, led by persistently high fuel prices, would erode earnings margins.”
ANA’s return to profit — after suffering an operating loss of 638 billion yen in the previous two years combined — was also helped by cost-cutting and government support, Shibata said. Analysts had forecast operating profit of 103 billion yen.
For the latest quarter, ANA’s operating profit was 21 billion yen versus a loss of 57 billion yen a year earlier. That also beat forecasts — analysts had predicted quarterly income of about 6.5 billion yen.
Shibata said ANA is investigating a recent software glitch that resulted in tickets being listed at the wrong prices on its Vietnam website. He didn’t disclose the financial impact of the error, saying the probe is ongoing. ANA said it was cancelling the tickets and issuing refunds.