ANA posts four-fold jump in Q2 net profit

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All Nippon Airways (ANA) has posted an almost four-fold increase in net profit for its second fiscal quarter, as it returns to the black after reporting losses in three successive quarters.

The Star Alliance carrier reported a net profit of ¥18.5 billion for the quarter ended 30 September, an improvement of ¥14.7 billion over the ¥3.8 billion net profit it posted in the corresponding period a year ago.

ANA subsequently reported net losses in the following three quarters.

Operating revenues were up 10.5% to ¥372.2 billion in the reporting quarter as a result of strong passenger demand, says ANA.

Operating expenses rose 1.3% to ¥323.4 billion, and the airline's operating profit surged nearly four-fold to ¥53.8 billion, it adds.

In terms of passenger traffic, domestic RPKs were up 2.2% while international RPKs rose 11.3%. In real terms, domestic passenger numbers grew 1.9% to 11.4 million while international passenger numbers increased 13.2% to 1.4 million.

Domestic capacity, as measured in ASKs, fell 3% and international capacity rose 6.8%, says ANA. Its domestic passenger load factor rose 3.5 percentage points to 69.2% and the international passenger load factor increased 3.3 percentage points to 81.2%.

"Despite the impact in the first quarter of the volcanic eruption in Iceland and political instability in Thailand, a marked recovery in business demand, and strong demand for leisure travel helped push passenger numbers on all routes above those of the previous year," says ANA.

On the cargo front, domestic cargo volumes fell 3.7% to 116,000t due to the downsizing of aircraft. International cargo volumes grew 39.7% to 139,000t on the back of strong demand on routes to China and other Asian countries.

Following the net profit in the latest quarter, ANA has revised upwards its profit forecast for its fiscal year ending 30 March 2011.

It now expects to make a net profit of ¥6 billion, up from the ¥5 billion it forecast earlier. The airline had posted a net loss of ¥57 billion for its last fiscal year.

Looking ahead, the airline says it will take advantage of growth opportunities from the expansion of Tokyo's Haneda Airport.

However, it cautions that operating conditions remain challenging despite a pick-up in the Japanese economy. "Employment conditions remain severe, and a suddenly stronger yen, along with sluggish stock prices, make taking an optimistic view difficult," says ANA.