ANA, JAL brace for profit slump as Iran war sends fuel costs up
Holdings expects net profit to fall 43.2% and JAL sees a 20.1% decline, with fuel and maintenance costs weighing even as bookings stay strong.
- ANA Holdings and Japan Airlines (JAL) are forecasting sharp profit declines for the fiscal year ending March 2027, with ANA projecting a 43.2% drop and JAL a 20.1% drop.
- The expected slump is primarily attributed to rising fuel prices driven by the war in Iran, which ANA estimates will reduce its operating profit by approximately 60 billion yen.
- JAL plans to offset some of the impact with higher fuel surcharges, while ANA's CEO anticipates the situation will normalize in the second half of the fiscal year.
- In addition to fuel costs, ANA also cited higher maintenance expenses as a contributing factor to the lower profit forecast.
ANA Holdings Inc. and Japan Airlines warned on Thursday (April 30) that earnings would weaken sharply in the business year ending March 2027, as the war in Iran drives up fuel prices.
ANA Holdings, the parent company of All Nippon Airways, projected a consolidated net profit of 96 billion yen, a 43.2% drop from the previous year. Japan Airlines, or JAL, forecast net profit of 110 billion yen, down 20.1%.
ANA said rising fuel expenses alone are expected to reduce its operating profit by about 60 billion yen. The company also pointed to higher maintenance costs as another drag on earnings.
JAL said persistently high fuel prices would cut its profits by 11 billion yen per month during its fiscal first quarter, which ends next month. However, the airline said the impact of the war in Iran would be offset by higher fuel surcharges.
The carrier also said passenger and cargo bookings, as well as prices, have been stronger than expected.
“We assume that the Middle East impact will gradually disappear in the July-September quarter and things will return to normal in the second half,” ANA President and CEO Koji Shibata said.
Both airlines reported stronger revenue and profit for the year ended March, supported by solid demand from visitors to Japan.
ANA posted record revenue of 2.5 trillion yen. JAL’s revenue climbed to 2 trillion yen, its highest level since it relisted in 2012 after going bankrupt in 2010.
[Copyright The Jiji Press, Ltd.]
