What challenges are ANA and JAL anticipating in the coming year?

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ANA and JAL Foresee Profit Declines Amid Rising Costs and Fleet Expansion

Both All Nippon Airways (ANA) and Japan Airlines (JAL) have indicated they anticipate challenges ahead, projecting a decline in net profits for the upcoming fiscal year. These forecasts are primarily driven by increasing operational costs, specifically the rising price of jet fuel, and investments in expanding their respective fleets. ANA, for instance, has projected its net profit could slip by 2.5 per cent to ¥108 billion, with operating profits expected to remain stagnant.
Anticipated Net Profit Reduction for ANA

ANA forecasts a 2.5 per cent decrease in its net profit, estimating it to reach ¥108 billion. This projection accompanies an expectation that operating profits will stagnate. The company's outlook suggests a more challenging financial period following a year where it achieved a record operating profit of ¥165 billion, although net profits had fallen 23 per cent due to a one-off gain in the previous year.
JAL Predicts Significant Net Profit Drop

Japan Airlines is bracing for a more substantial downturn, predicting a drop of approximately 25 per cent in net profits. This forecast is closely linked to escalating expenses. The airline cited the ballooning price of fuel as a major contributing factor to these anticipated cost increases.
Impact of Fleet Expansion on Costs

Beyond fuel prices, the expansion of both airlines' fleets is also contributing to the anticipated financial headwinds. An expanded fleet inherently leads to higher operational and maintenance costs. JAL specifically identified this fleet expansion as a reason for rising costs that will impact its profitability in the coming year.

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What challenges are ANA and JAL anticipating in the coming year?

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