Strong travel demand and cost controls helped ANA Holdings, the parent of All Nippon Airways, power to a record operating profit its latest financial year.

ANA’s highlights in the 12 months to 31 March included the capture of inbound demand from Asia and North America, which also saw “higher-for-longer” yields.

ANA 777-300ER and 787-9 at Tokyo Haneda

Source: Greg Waldron/FlightGlobal

Carrier captured inbound traffic from Asia and North America

Domestically, ANA was able to capture strong demand for leisure travel, while low-cost unit Peach expanded its international routes, resulting in record revenues and operating profitability.

“Passenger demand continues to recover despite concerns about geopolitical risks such as the situation in Ukraine and the Middle East region and the implications for the airline industry,” says ANA.

“Against the backdrop of factors such as the change in the status of Covid-19 to a category 5 infectious disease in Japan, both international and domestic passenger services performed well, supported by strong demand for inbound travel to Japan and domestic leisure demand, leading to significantly higher operating revenue compared to the previous fiscal year.”

For the 2023 financial year ANA saw a consolidated operating profit of Y208 billion ($1.3 billion), doubling from a year earlier. Revenue rose 20.4% to Y2.1 trillion, as net profits nearly doubled to Y157 billion.

Mainline carrier ANA’s international passenger revenue jumped 68% to Y728 billion, as the number of international passengers carried rose 69.4% to 7.1 million. International ASKs rose 48.5% as RPKs rose 56%, while ANA’s international passenger load factor rose 3.7 percentage points to 77.3%.

ANA’s domestic passenger revenue rose 21.8% to Y654 billion, as the number of domestic passengers rose 18% to 40 million. Domestic ASKs rose 8.7% as domestic RPKs rose 18.2%. ANA’s domestic passenger load factor rose 5.7 percentage points to 70.2%.

Low-cost unit Peach also had a good year, with revenue climbing 53% to Y138 billion, and passengers carried climbing 20.2% to 9.3 million. Peach’s ASKs rose 10%, RPKs rose 29.9%, and its passenger load factor improved 13.2 percentage points to 86.7%.

Cargo, however, was a weak spot for ANA. “For international cargo service, despite efforts to capture demand between North America and Asia, volume and revenue for international cargo decreased from the same period of the previous fiscal year, due to a decline in market demand from major industries such as semiconductors, electronics and automotive-related industries,” says ANA.

“Nevertheless, its revenue remained at approximately 1.5 times higher compared to fiscal year 2019. For the route network, we worked to ensure profitability by actively monitoring demand trends and flexibly adjusting the utilization of freighters.”

ANA’s international cargo revenue fell 49.5% to Y156 billion, as freight carried declined 15.6%.

For the year ahead, ANA Holdings expects revenues to rise on the back of more growth in international travel demand. For the 2024 financial year ended 31 March 2025, it forecasts that operating revenue will rise 6.5% to Y2.2 trillion, but believes that an increase in operating costs will push operating profits down 18% to Y170 billion.