JAL soars in 2013, but costs hurt ANA

Japan Airlines (JAL) has posted another strong full-year profit, as the national carrier’s resurgence continued in 2013.

For the financial year ending on 31 March 2014, JAL posted a net profit of JPY166.2 billion (US$1.62bn). And while this marked a 5.4% downturn compared to the JPY171.6bn profit it recorded in the 2012-13 financial year, the result still marks another emphatic step in JAL’s revival. The airline that filed for bankruptcy protection in January 2010 has now generated net profits totalling approximately US$5bn in the last three years.

The 2013-14 year was not without its headwinds however; JAL complained of “intensifying competition” at Tokyo’s airports, and was upset when it was largely overlooked in favour of ANA for the new slot entitlements at Haneda. Meanwhile a weaker yen contributed to higher fuel costs.

Overall, the 9.5% rise in JAL’s costs outstripped the 5.7% increase in revenues achieved by the airline.

But JAL’s main rival, ANA, was hit even harder by these rising costs. ANA posted net profits of JPY18.8bn in the 12 months to 31 March 2014, 56.2% lower than the previous financial year. The airline actually generated record revenues of JPY1.60 trillion, but its expenses also spiralled, up 11.3% to JPY1.54trn.

“Operating income, recurring profit and net income [came] down compared to the prior year primarily due to increased fuel costs and the weakening of the Japanese yen,” ANA said in a statement. “Fuel costs increased by 22% over the prior year, accounting for approximately one quarter of all air transportation business expenses.”

ANA remains Japan’s largest airline however, in terms of fleet size and passenger traffic. In the 2013-14 financial year, ANA carried 49.0m passengers, while JAL handled just 38.9m. JAL is Japan’s biggest international airline however, carrying 7.7m passengers on overseas routes last year, compared to ANA’s 6.3m.