By Satoshi Sugiyama
TOKYO (Reuters) -Japanese airline ANA Holdings forecast a return to annual profit as a rebound in domestic demand and easing international travel curbs aid in its recovery from two years of pandemic-driven losses.
The carrier on Thursday posted an operating loss of 173.1 billion yen ($1.3 billion), but expects to swing to a 50 billion yen profit in the year that began April 1.
Japan’s largest airline said a sustained focus on reducing operating expenses along with increased domestic travel, strong cargo sales and favorable conditions for growth of international traffic point all point to a better year.
Japan in late March lifted all domestic pandemic restrictions. That has cleared the way for a forecast recovery in domestic flight demand to 80% of pre-pandemic levels on average this financial year, ANA Chief Executive Koji Shibata told reporters.
The number of passengers who booked flights for next week’s string of public holidays known as “Golden Week” is expected to roughly double from a year ago, he added.
Annual revenue surged 40% to 1.02 trillion yen, driven in part by a record cargo performance and is forecast to jump another 63% this financial year. In the international market, ANA and rival Japan Airlines Co Ltd (JAL) face uncertainties from Japan’s prolonged border restrictions and rising fuel costs worsened by the war in Ukraine.
Prime Minister Fumio Kishida has repeatedly decided against opening the nation’s borders to overseas tourists, lifting pandemic-related bans only for students and business travellers.
International demand is only at 30% of pre-pandemic levels in April and May and Shibata forecast a full recovery would take until March 2024.
He called on the Japanese government to lift a cap of 10,000 daily arrivals and accept overseas tourists. The tourist ban, which prevents the industry from capitalising on a weakening of the yen to 20-year lows, has not yet incurred much public anger and may not be lifted until after an election in July, according to analysts.
($1 = 130.5300 yen)
(Reporting by Satoshi Sugiyama, Editing by Jamie Freed)