Japan Airlines Recovers:

 Article Source: https://mainichi.jp/english/articles/20230502/p2g/00m/0bu/034000c

Article:

TOKYO (Kyodo) -- Japan Airlines Co. said Tuesday it posted its first annual net profit in three years for fiscal 2022 as air travel demand is recovering from the coronavirus pandemic.

It posted a net profit of 34.42 billion yen ($250 million) for the year ended March, in a reversal from a net loss of 177.55 billion yen the previous year, the airline said.

Ideas:

Japan airlines seems, like most airline these days, to have small profit margins and any variable such as the pandemic or an increase in oil prices can cause its profit margin to be less than good.

What might not be recovering, maybe yes maybe no is business travel where business people go from city to city for meetings as now companies might consider the use of Zoom for meeting and maybe they might not see the need for face to face meetings any more except in first time meetings or the most important meetings.

So JAL ANA and others might see less business from companies and they no longer need to travel throughout Japan to see clients.

Article:

Sales doubled from a year ago to 1.38 trillion yen as Japan's relaxed COVID-19 measures boosted sightseeing trips and business travel.

"The easing of the government's border control measures last year was highly effective in creating (travel) demand," President Yuji Akasaka said at a press conference.

Ideas:

As tourism and business trips were put-off for two plus years maybe that created an appetite to travel more or to make-up for lost travel time and tourists and some business people traveled a lot in 2022. 

Sales might have doubled, which is of course good, but what about next profit after expenses for JAL, ANA etc.

For example does JAL have a lot of higher level executives with high salaries, and does it have a lot of staff with high salaries, which as airline pilots.

Of course its good if airline pilots are paid a good wage and flight attendants are paid a good wage but does that might mean higher airline tickets for the average customer.

Of course there is always the chance of another pandemic and hopefully Japan and other countries are better prepared for the next pandemic. 

Article:

Akasaka added he also hopes to see more Japanese traveling abroad, spurred by the government's plan to downgrade the legal status of the novel coronavirus similar to that of seasonal influenza on Monday.

The downgrade will ease preventive measures such as limiting the movements of infected individuals and their close contacts.

Ideas:

Japanese traveling abroad might be hindered with the weak yen which means Japanese have to pay more for what they buy in other countries.

But it doesn't seem to have affected travel to South Korea as many Japanese still travel to South Korea recently.

Hopefully the  virus situation will go the way of the flu and just be seen and a normal virus in the future and won't affect travel of other activities.

Maybe in the future, if there is another pandemic, countries will be able to manage and control the pandemic situation and there won't be the need for less travel like in 2020/2021.

Article:

The results came as rival ANA Holdings Inc. also said last week it returned to the black for the first time in three years last fiscal year due to improved travel demand.

JAL said the removal of a cap on daily arrivals and relaxed border control measures pushed up the number of cross-border travelers, boosting sales in its international operations sixfold.

Ideas:

Perhaps, if countries had been better prepared, or had better resources maybe there wouldn't be the need for travel restrictions as maybe the future pandemic can be handled like a normal virus with exceptions.

ANA probably like JAL operates on a small or thin profit margin and as such any external variable such as reduced demand might have major affects on its profit and profit margins.

Unfortunately, many airlines have reduced the number of flights and have reduced the size of planes they use for travel.

For example in February traveling between South Korea and Japan the plane was much smaller than used in previous trips before the pandemic.

The plane was a one isle plane and it was very crowded going to Japan on ANA and back to South Korea from Japan. 

Article: 

Sales in its domestic operations almost doubled thanks to a government subsidy program to promote tourism.

For the current business year ending March next year, the company expects its net profit to rise 59.8 percent to 55 billion yen on sales of 1.66 trillion yen, up 20.5 percent.

Ideas:
Domestic operations in Japan might not have been as affected as international operations as maybe Japan could travel more in Japan than internationally.

But a question might is do airline make more profit on international flight or more on domestic flight. Of course the volume of international flights is lower but per customer do they make more profit. 

The key variable right seems to be gas/fuel prices for airlines. As global supplies are going to be reduced does that mean fuel cost will continue to be high which or course means customers will have to pay higher ticket prices in the future.

Article:

JAL expects demand for domestic flights for the current fiscal year to recover to 94 percent of 2019 levels on average, while that of international flights is projected to be about 65 percent of the pre-pandemic level.

The airline also said it will remodel three Boeing 767-300ER planes to freighters. It is the first time for JAL to operate company-owned freighters in 13 years as it seeks to expand its air cargo business revenue.

Ideas:

The prices for tickets on airlines is not cheap these days because of fuel costs and or airline companies trying to make up for losses during the pandemic.

Domestic flights might recover to 94 percent or higher but international flight these days are just too expensive for most customers. 

And the weak yen might cause some to not travel abroad as they have to pay more for their yen and as such might be waiting for ticket prices to do down and or the yen to get stronger in the future.

Other countries such as the US have or are experiencing all kinds of delays and other factors which is making airline travel not so good these days. 

Hopefully Japan is in a better situation with available pilots and available flights for all places to Japan and internationally. 

Have a nice day and be safe!