As international travel slowly picks up again after the pandemic-induced depression, Asian airlines are seeing a stunning recovery. Three major carriers in the area have reported considerable profits and expressed confidence about the future development in China.
For the fiscal year that ended in March, Singapore Airlines (SIA) recently reported a record net profit of 2.16 billion Singapore dollars ($1.61 billion). This outstanding accomplishment is the airline’s biggest net profit in its 76-year history, virtually erasing the SG$962 million deficit recorded in the previous fiscal year. Following the redemption of a tranche worth SG$3.5 billion six months ago, SIA also disclosed its intentions to redeem SG$3.1 billion worth of required convertible bonds.
The first full-year profit for All Nippon Airways (ANA) in Japan since the Covid-19 epidemic was declared. For the fiscal year that ended in March, ANA reported a net profit of 89.4 billion yen ($650.3 million), a significant improvement from the net loss of 143.6 billion yen recorded the prior year. Furthermore, ANA’s present net profit has already eclipsed pre-pandemic levels for the 2019 fiscal year, which saw a net profit of just 28 billion yen, or less than a third of its present profits.
The similar thing happened to Japan Airlines (JAL), which reported a full-year net profit of 34.4 billion yen as opposed to a huge loss of 177.5 billion yen in the same time last year.
Looking forward, all three airlines are counting on China to be a significant factor in future development. The strong demand for travel from March to June, notably to China, Japan, and South Korea, was cited by SIA as having a positive impact on advance sales in all cabin classes. As tour operators raise their reservations to China in the next months, Lee Lik Hsin, executive vice president for commercial at SIA, expressed optimism about China’s reopening and predicted a resurgence in tourism.
As regulations continue to loosen, JAL anticipates development in the international market, notably on flights to China. Without naming any specific nations or areas, ANA spoke of the fast improving business climate, with domestic flights seeing a relaxation of activity limits and international flights seeing nations loosen entrance requirements. The CEO of ANA, Koji Shibata, stressed the potential effect of summer Chinese visitors on the airline’s revenue.
In addition, while reporting a 35% year-over-year decline in net profit in the first quarter of 2023, South Korean airline Korean Air expects a rise in Chinese tourism this year. The airline anticipates a rise in demand for flights to China if restrictions on group travel are lifted. Additionally, Korean Air sees advantages from transit travelers heading to China from the Americas through Korea.
These Asian airlines’ spectacular turnaround and profitability, together with their upbeat perspective on the Chinese market, point to a potential comeback for the area’s aviation sector. Airlines are putting themselves in a position to benefit from the return of international travel as travel restrictions continue to loosen and demand slowly increases.
