ANA, JAL eye double-digit net profit drops in FY 2026 amid Mideast conflict

TOKYO (Kyodo) -- ANA Holdings Inc. and Japan Airlines Co. said Thursday their net profits for the current fiscal year will likely drop by double digits following record earnings a year earlier, as the Middle East conflict weighs on their bottom lines.

Hurt by surging fuel costs, ANA, the parent of All Nippon Airways Co., expects a 43.2 percent drop in net profit to 96 billion yen ($612 million), a bigger fall than its rival JAL, which projected a 20.1 percent year-on-year decline to 110 billion yen.

The Japanese airlines still expect continued profit growth for both domestic and international travel in fiscal 2026, a year after ANA's revenue grew 12.3 percent to a record 2.54 trillion yen and JAL reported a 9.1 percent increase in sales to 2.01 trillion yen, the highest since its relisting in 2012.

Both airlines are set to raise their surcharges for international flights in May to pass on higher fuel costs, which would mitigate the negative impact on their earnings.

For fiscal 2026, ANA forecasts sales will rise 9.1 percent to 2.77 trillion yen on operating profit of 150 billion yen, down 31.0 percent.

ANA expects the Middle East crisis, including soaring fuel prices, will have a negative impact of roughly 60 billion yen.

Operating profit will fall based on that current scenario, but "I do not consider this to be the final outcome," President Koji Shibata said at a press conference.

"We will, of course, continue efforts to push for 150 billion yen or more" in operating profit, he added.

JAL, for its part, estimates the current negative impact of the Middle East conflict at roughly 11 billion yen a month in the first quarter.

Helped by government subsidies and higher fuel surcharges, the impact will be reduced to a level "significantly below 11 billion yen" from the second quarter, according to JAL Chief Financial Officer Yuji Saito.

Saito also noted that travel demand is strong and called the business environment "favorable," adding that revenues have been robust across international and domestic flight services, as well as in its cargo and low-cost carrier businesses.

JAL maintained its fiscal 2026 forecasts announced in March, expecting sales to grow 4.1 percent to 2.10 trillion yen, though increased maintenance costs will weigh on its net profit.

For the past fiscal year through March 31, both airlines had solid earnings

ANA's net profit rose 10.5 percent from a year earlier to 169.08 billion yen, while operating profit climbed 10.6 percent to 217.44 billion yen, both marking record highs.

In addition to sales growth on the back of strong demand amid Japan's inbound tourism boom, ANA also benefited from revenue at Nippon Cargo Airlines Co., which became a wholly owned subsidiary in August.

The number of domestic passengers rose 3.6 percent to 45.64 million, while international travelers saw a 11.8 percent increase to 9.02 million.

JAL's net profit jumped 28.6 percent to 137.60 billion yen, driven by an increase in travelers, including those flying on business and inbound tourists.

The number of domestic passengers rose 5.8 percent to 38.23 million, while international travelers increased 5.6 percent to 8.01 million.