Japan Airlines Corp expects to return to profitability on a consolidated basis in the current fiscal year to Mar-2011, the first time in three years and one year earlier than planned (Kyodo News/Nikkei, 07-Jun-2010). JAL has reportedly included the forecast of a JPY22 billion (USD240 million) operating profit in its draft income and expense plan, submitted to its main lenders, instead of an expected operating loss of more than JPY30 billion (USD327 million). JAL also expects group operating profit to increase to JPY73 billion (USD796 million) in FY2011 and to JPY115 billion (USD1.3 billion) in FY2012, with revenue to be flat for the next three years. President, Masuru Onishi, stated the carrier is experiencing passenger demand ahead of the conservative expectations outlined in its restructuring plan (Reuters, 05-Jun-2010). Mr Onishi added the implementation of the restructuring plan was generally on track.
JAL expects to return to profit a year earlier than expected, traffic better than expected
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LCCs accounted for 1% of available seats between Japan and Korea in 2009, reached 37% in 2016, and so far in 2017 will account for 49% of the market. Limited airport data indicates that LCCs, operating at higher load factors, already transport more passengers than full service airlines, and by the end of 2017 LCCs should easily account for the majority of capacity.
LCCs already fly more airport pairs than their full service counterparts. The LCC development between Japan and Korea illustrates underlying LCC opportunity in Northeast Asia but also reflects on the importance of liberalisation, and for full service airlines to have efficient cost bases.
Finnair accelerates capacity growth, led by long haul; seeks cost efficiency through fleet & labour
In 2016 Finnair accelerated its rate of capacity growth after a modest return to expansion in 2015, following cuts in 2014. It also experienced a fall in unit revenue (as did most European airlines), most notably in the regions of highest capacity growth, i.e. the long haul markets North America and Asia.
Asia is Finnair's most important long haul market (Japan and China are its two biggest markets by ASKs) and its ranking by seats on routes between European and NE/SE Asia is disproportionate. It has ambitious growth plans in the region and will increase frequencies to Tokyo and Hong Kong this summer. Its long haul network, which will also extend to San Francisco this summer and Goa next winter, is largely founded on connecting traffic via its Helsinki hub.
Finnair's return to capacity growth has coincided with a return to profit, but lower fuel prices were the main driver of its bottom line improvement. Its profit margins remain slim and, beyond the vagaries of fuel price benefits, Finnair aims for more sustainable unit cost cuts. Fleet strategy and labour productivity form a two pronged attack on its cost base.