Passengers check in at a Singapore Airlines counter in the departure hall of Singapore’s Changi International Airport on December 2, 2021.
Rosslan Rahman | AFP | Getty Images
As global travel picks up, Asia’s three largest airlines bounced back from the pandemic slump to return to profitability, all saying China could be their next bright spot.
Just this week, Singapore’s flag carrier Singapore Airlines posted record net profit Total revenue was S$2.16 billion ($1.61 billion) for the fiscal year ended in March.
It was the highest net profit in its 76-year history and was in stark contrast to the S$962 million loss recorded in the previous financial year.
As a further measure of financial strength, the airline also announce its intention Redemption of S$3.1 billion of mandatory convertible bonds. Six months ago, the company redeemed another tranche of mandatory convertible bonds worth S$3.5 billion.
Japan’s All Nippon Airways Also turned in its first full-year profit since the start of the Covid-19 pandemic
All Nippon Airways recorded net profit The net loss for the fiscal year ended March was 89.4 billion yen ($650.3 million), compared with a net loss of 143.6 billion yen a year earlier.
This has surpassed pre-pandemic levels in fiscal 2019, which ended in March 2020. At the time, ANA posted a net profit of just 28 billion yen, less than a third of its current net profit.
Japan Airlines There was also a turnaround in the fiscal year to March, with Annual net profit Revenue was 34.4 billion yen, compared with a loss of 177.5 billion yen a year earlier.
Hopes for China’s reopening
All three airlines are looking to China for further growth drivers.
SIA said travel demand “remained strong” from March to June, supported by a recovery in air travel in East Asia. “Forward sales remained healthy across all classes, led by strong bookings growth in China, Japan and South Korea,” the airline said in its earnings statement.
Li Lixin, executive vice president of commercial, said at an earnings briefing on May 17 that the airline was “excited” about China’s reopening and that as stakeholders such as travel agencies increase bookings to China in the coming months, Travel will recover.
JAL feels the same way. While the Japanese airline managed to capture demand Judging from the international passengers on Japanese routes in the last fiscal year, with the relaxation of restrictions on Chinese routes, the international segment is expected to grow further.
ANA did not specify any particular country or region where it seeks growth, but airline says The industry environment is “improving rapidly”, with domestic flight restrictions being eased and international flight restrictions being lifted.
The Japan Times reported ANA Chief Executive Koji Shibata said that while recovery in Europe and China was still lagging, “demand from Chinese tourists in summer will have a further impact on our revenue,” he added.
Separately, South Korean airline Korean Air also expects a boost in Chinese tourism this year, saying Rapid recovery in global passenger demand expected In the second quarter of 2023.
That’s despite reporting a 35% year-on-year drop in net profit to 335.4 billion won ($272.6 million) in the first three months of 2023. Korean Air’s fiscal year runs from January to December.
In its first-quarter earnings report, the airline forecast increased demand from China “when restrictions on group travel are lifted”. Travel from the Americas is also expected to benefit the airline, as passengers stop in South Korea en route to China.
Full-year net profit for the fiscal year ended December rose 179 percent year-on-year to 1.78 trillion won.