Japan’s airlines plot path to profitability – part 2: JAL’s demand growth may spur quick rebound

While Japan has moved more slowly than many other Asia-Pacific countries to reopen its borders, it is now taking important steps to ease border restrictions. The expected demand boost means Japan's major airlines can see a path back to profitability for the current fiscal year.

Foreign travellers have generally been barred from entering Japan since the early days of the coronavirus pandemic. This prohibition was removed in early Apr-2022, but effectively only business travellers and students could enter, whereas foreign leisure travellers were still excluded.

Now the Japanese government has signalled it will soon start allowing tourists to enter. This could start with a trial programme for organised tour groups this month, and the Prime Minister has said the government intends to allow a broader reopening for vaccinated tourists from Jun-2022. Details of these steps are yet to be revealed, however.

In this second part of this feature we consider the outlook for Japan Airlines (JAL) as it seeks to bounce back to net profit in the fiscal year as international markets open and its network is rebuilt.