All Nippon Airways (ANA) Holdings achieved another strong profit rise in its fiscal year ended March 31, driven mainly by a sharp increase in international revenue.
The group reported a record net profit of ¥143.8 billion ($1.3 billion) for the fiscal year, up 45.6% from ¥98.8 billion in the previous year. Revenue rose 11.7% to ¥1.97 trillion, expenses were up 11.6%, and operating profit increased by 13% to ¥164.5 billion.
The result was better than the Japan’s largest carrier forecast in February. At that time, ANA estimated its net profit would be ¥132 billion, with a revenue projection that was slightly lower than the final total. This was a conservative estimate, which had not been adjusted from its previous update.
International revenue rose 15.6% year-on-year; capacity grew 7% and traffic was up 7.7%. This resulted in load factor increasing slightly to 76.3%. The improvement in the international operation was largely because of robust business travel demand originating in Japan, and strong inbound tourism.
Domestic services saw a much more modest improvement and a small reduction in capacity, reflecting long-term trends in this market. Revenue rose 1.7%, with traffic increasing 3.3% on a 1.1% capacity cut. Load factor improved 2.9 points to 68.9%.
Other air transport operations—including LCC subsidiaries Peach Aviation and Vanilla Air—saw a revenue increase of 36.9%. Both LCCs increased their fleets, with Peach adding two aircraft for a total of 20, and Vanilla lifting its total by three to 15.
In the cargo sector, international revenue increased 26.5%, thanks to steady growth in automotive parts and electronics shipments to North America and Europe and inbound cargo from China and other parts of Asia. Domestic cargo revenue fell 0.5%.
For the current fiscal year through March 31, 2019, ANA forecasts revenue will increase again to just over ¥2 billion. However, net profit is expected to drop to ¥102 billion, a ¥41.8 billion decrease.