Japanese airline update: JAL and ANA target winter gains as inbound demand soars
Japan's major airlines are planning significant additions in the upcoming northern winter schedule season, following a strong summer of inbound tourist demand.
While outbound leisure travel from Japan still lags, this has been offset by surging inbound travel. This continues a trend that has been evident for several months, as this analysis also showed.
There are enough promising signs to prompt both All Nippon Airways (ANA) and Japan Airlines (JAL) to add more flights in the winter season, which also coincides with the second half of their fiscal year.
- ANA’s international ASKs and RPKs were both up by 10.3% for the Jun-2024 quarter.
- The airline expects to increase its European capacity by 44% year-on-year this northern winter.
- JAL will add 27 frequencies on eight international routes for the winter season.
- Japan’s international passengers recovered to nearly 85%, with inbound 10% above 2019 levels.
ANA's international capacity and traffic are both up significantly year-on-year
ANA reported robust growth in its international operation during the summer months.
For the three months through 30-Jun-2024 - its fiscal first quarter - ANA's capacity and traffic (ASKs/RPKs) were both up by 10.3% year-on-year.
The airline said that this was spurred by the high inbound demand, as well as improving outbound leisure and business demand.
ANA highlighted an increase of flights in the China market during that quarter, as well as its highest-ever passenger total on Hawaii routes during the traditional Golden Week holiday period.
The chart below shows that ANA's international capacity - this time measured in weekly seats - was 9.8% higher for the week of 19-Aug-2024 versus the same week in 2023.
Weekly seats were at 80.4% of 2019 levels.
All Nippon Airways: international capacity, as measured in weekly seats, from 2019
Europe is a priority for ANA as it continues to add routes
So, looking ahead to the second half of the airline's fiscal year (1-Oct-2023 to 31-Mar-2024), ANA plans to operate 8% more international ASKs versus the same period in the previous year.
European operations will be a particular focus, with ASKs expected to be up 44% year-on-year in the second half.
ANA plans to launch three routes to Europe in this period.
It will introduce a route from Tokyo Haneda to Milan on 3-Dec-2024, another from Tokyo Haneda to Stockholm on 31-Jan-2025, and start service from Tokyo Haneda to Istanbul on 12-Feb-2025.
The Stockholm route is expected to give more connecting opportunities in the Nordic region, and Istanbul will help with connectivity to the Middle East and Africa.
In other regions, ANA aims to resume its Tokyo Narita-Perth route on 14-Oct-2024, and will add frequencies on the Tokyo Haneda-Bangkok and Tokyo Narita-Hong Kong routes.
JAL added summer capacity to cater to growth markets in particular
The JAL Group also saw improved summer results. International ASKs were up 3.8% year-on-year for the quarter ending 30-Jun-2024, with RPKs up 9.4%.
The Europe, South Korea, and Hawaii/Guam markets had the strongest ASK gains, with year-on-year increases of around 20% for the month of Jun-2024. The China market was up by nearly 5%.
The chart below shows that the JAL Group's international seat capacity closed the gap to 94.7% of 2019 levels for the week of 19-Aug-2024. It was up 9.6% year-on-year for that week.
JAL Group international capacity, as measured in weekly seats, from 2019
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For the sake of comparison with ANA, however, it is probably better to use data for JAL by itself rather than the group figures, which include subsidiaries.
So for JAL itself, international seat capacity is up to 80.4% of 2019 levels - the same as the ANA recovery level.
JAL is increasing flights on routes that will supplement its transit flows
JAL plans to add several additional frequencies in its Asia-Pacific network in order to boost opportunities for international connecting traffic.
The airline revealed that it would introduce 27 new frequencies on eight routes for its winter schedule, in comparison to the current summer schedule. JAL said this move is intended to meet strong demand for transit traffic between North America and Asia, and also for inbound travel to Japan.
The affected routes are between Tokyo Narita and Jakarta, Bengaluru, Melbourne, Shanghai Pudong and Guam; between Osaka Kansai and Shanghai Pudong; and between Nagoya and Shanghai and Taipei.
JAL said the Guam increase is aimed at the "steady recovery" of Japanese outbound tourism.
There will also be some frequencies added, or aircraft upgauged, on certain routes on peak travel days.
Japan's inbound visitor numbers are ahead of 2019 levels, which is driving up overall capacity
According to data from CAPA - Centre for Aviation and OAG, overall international seat capacity in the Japanese market reached 93.7% of 2019 levels for the week of 26-Aug-2024.
In the week of 12-Aug-2024 international seat capacity hit its highest level since before the COVID pandemic. Each of the last four weeks was higher than any before Aug-2024 (and after 2019).
Japan's international capacity, as measured by weekly seats, from 2019
International traffic has not recovered as quickly as capacity, as the chart below shows.
Japan's international passenger numbers reached 83.8% of 2019 levels in May-2024 - this represented an increase of 28.9% compared with the same month in 2023.
Japan's monthly international passenger numbers, from 2019
The next chart below shows that inbound tourism has grown more strongly than the overall passenger recovery rate depicted in the previous chart.
For the month of Jul-2024, the inbound visitor total was actually 10% higher than the same month in 2019.
This means that outbound traveller numbers must still be lagging significantly.
Japan's monthly visitor arrivals
Inbound and outbound demand are still being pulled in opposite directions by the same dynamic
Inbound visitor numbers have gone from strength to strength over the summer season, and are supporting international capacity recovery, whereas outbound leisure travel remains low.
The wide variance between these flows is not hard to explain, as the same factor that is boosting inbound tourism is dampening outbound. That factor, of course, is the relative weakness of the Japanese yen.
While outbound travel will continue to improve, it may take a sustained strengthening of the yen for a dramatic rebound to occur.
Although the yen increased in value versus the dollar this month (Aug-2024), this followed significant volatility this year.
ANA and JAL have taken a sensible approach to international capacity, adding flights and resuming services gradually where inbound demand is booming. This approach is continuing with the moderate additions to their winter schedules.