Profits at Japan’s ANA soar as rival JAL sinks further

Profits at Japan's ANA soar as rival JAL sinks further

Tokyo (AFP) – Japanese airline ANA on Friday posted record profits, while the bottom line worsened for rival JAL, and both carriers said they expected higher costs to eat into this year’s earnings.

ANA Holdings reported its largest-ever net profit of 143.9 billion yen ($1.3 billion) for the year that ended in March, up 45.6 percent from the previous year.

It was the third consecutive year that ANA has posted record profits.

Strong earnings were “underpinned by robust demand, strong performance in international passenger services and international cargo services, and the addition of revenue from (budget carrier) Peach Aviation Ltd,” ANA Holdings said in a statement.

Operating profit rose 13.0 percent to 164.5 billion yen as revenue grew 11.7 percent to 1.97 trillion yen.

For the current year to March 2019, however, ANA expects its net profit to slip 29 percent to 102 billion yen, and it forecast operating profit would stay almost flat at 165 billion yen, missing the lowest analyst estimate of 167 billion yen in a Bloomberg survey.

Revenue was projected to edge up three percent to two trillion yen.

But an ANA spokeswoman put a bullish spin on the forecast, dismissing views that the company’s earnings are in descent.

The company is “stepping up investment for the future while maintaining a high level of profit,” she said, speaking on condition of anonymity.

She said the firm was investing more in maintenance and safety measures, developing human resources, and introducing new aircraft.

Japan Airlines (JAL) meanwhile said net profit fell 17.5 percent to 135.4 billion yen, while sales rose 7.3 percent to 1.38 trillion yen in the latest year.

Net profit is forecast to fall nearly 19 percent to 110 billion yen for the current year despite a five percent increase in revenue to 1.46 trillion yen.

Fuel costs are likely to rise on higher oil prices while expenses related to newly introduced aircraft weigh, JAL said.