ANA reports Q1 profit

Japan’s All Nippon Airways (ANA) on Friday posted a net profit of 668 million yen (Dh31.19 million, $8.55 million) in its fiscal first quarter to June, reversing a year-earlier loss, thanks to increased travel demand. The carrier’s sales rose 12.5 per cent from a year ago to 343.19 billion yen as the Japanese economy continued its recovery from last year’s quake-tsunami disaster, while the stronger yen made overseas trips cheaper. In the fiscal first quarter last year, ANA logged a group operating loss of 8.1 billion yen amid tumbling passenger numbers in the aftermath of the March 11 disasters and meltdowns at the Fukushima Daiichi nuclear plant. Cost cutting and a recovery in international travel demand helped the nation’s second-largest airline post a record operating profit of $1.2 billion in the fiscal year ended in March. ANA said international flight sales rose more than 20 per cent on year in the latest quarter. While the surging value of the yen has hurt the nation’s manufacturers it has had a positive effect on airlines as Japanese tourists’ spending power increases. “Travel demand for international passengers as well as visits to Japan, which were badly damaged by the disaster last year, steadily recovered,” the company said in a statement. Domestic flight revenue rose nearly 11 per cent, it added. But the airline also warned it was “facing a number of headwinds in the shape of a slowing world economy, the growing government debt crisis in Europe and increased competition”. ANA also said “the start of full-scale operations by low-cost carriers in Japan” means rising competition in the aviation industry. Japan’s aviation market has long been dominated by ANA and rival Japan Airlines, but this year has seen the launch of a number of new cheap carriers that could challenge that supremacy. Both airlines have themselves invested in the new budget start-ups. ANA last year set up Peach Aviation with a Hong Kong investment fund, while Japan Airlines announced a tie-up with Australia’s Qantas to launch Jetstar Japan. AirAsia Japan - a joint venture between ANA and Malaysia’s budget firm AirAsia - has also launched its lower-cost service. ANA, which late last year became the first airline to fly Boeing’s new 787 Dreamliner, said it saw a host of other challenges for the year to March 2013 including rising oil prices and exchange rate fluctuations. Japan Airlines, the once-bankrupt carrier that is planning to re-list on the Tokyo exchange next month, said Thursday that its April-June quarter net profit had more than doubled to 26.9 billion yen. From gulfnews