All Nippon Airways, due to non-flying businesses, returns to black with 25% international growth

All Nippon Airways Holdings returned to the black in 1Q2014, the three months to 30-Jun-2014. The flagship air transport segment reduced losses but remained in the red, however this view is incomplete as intra-segment transfers have revenue credited to very profitable other segments. Regardless of where the money flowed, the story was in ANA's air transport segment, and especially international services. International ASKs grew mostly due to new daytime Tokyo Haneda slots, and international is very much ANA's theme as it looks to move to operating more international than domestic ASKs.

ANA's position is comfortable but there are areas for improvement, starting with the recent expansion that grew ahead of demand: the 25.2% ASK increase was larger than the 21.7% increase in RPKs. The growth propelled ANA to becoming larger than Japan Airlines internationally, but also led to decreased load factors in Europe by approximately 5ppts. The system wide international load factor, at 69%, still shows room for improvement. ANA's core domestic market, responsible for the bulk of profits, suffered unwelcome yield pressure as ANA discounted tickets to grow RPKs by 3.5% while marginally decreasing ASKs by 0.5%. Domestic load factors grew 2.2ppts, but to a still low 59.2%.