All Nippon Airways 1H2014: profits up despite greater sixth freedom traffic push in Tokyo hub

All Nippon Airways reported a larger first half profit (for the six months to 30-Sep-2014) in line with its projection. ANA's delivery was comprised two different strategies for its domestic and international network. ANA's core domestic market saw load factors improve at the expense of yields, a strategy ANA is undertaking to boost traffic and make up for sluggish consumer demand following consumption tax increases, something initially ANA wasn't concerned about.

In the international market, ANA has seen yield grow but load factor decline as its large capacity ramp-up at the start of the year is still being absorbed. This growth was concentrated in Europe, where ANA's performance lags compared to its other foreign markets.

With more international, and especially long-haul growth, ANA is pushing sixth freedom traffic, typically lower yielding. This segment, albeit small, is growing faster than traffic to/from Japan. The higher share of premium seats on long-haul has helped ANA record 12% of its international passengers in business class, up from 10% in 2010.