Japan’s two largest carriers remain optimistic about their longer-term prospects, even as they urge “constant vigilance” against ongoing challenges in the wake of the Iran conflict, particularly around high fuel costs.
Japan Airlines and All Nippon Airways maintain their earnings guidance of a profitable 2026 financial year, which ends on 31 March 2027, even if their profits are lower than previous years.
The outlook is also a contrast to other carriers who have suspended their earnings guidance amid growing volatility.
JAL is targeting a full-year net profit of Y110 billion ($701 million), slightly lower than the Y137 billion posted in the 2025 fiscal year.
The Oneworld operator notes: “We remain in a business environment that requires constant vigilance towards the political and economical shifts, as the international situation has been rapidly becoming more uncertain, including the soaring crude oil prices due to the prolonged conflict in Ukraine and heightened tensions in the Middle East.”
ANA parent ANA Holdings offers a similarly cautious take: “[In] addition to US trade policies, the impact of the situation in the Middle East is significant, and it is necessary to pay attention particularly to trends in the supply and prices of fuel which is essential for flight operations.”
ANA Holdings, which is forecasting a full-year profit of Y96 billion, goes a step further in its projection, where it assumes the Middle East conflict will be resolved by end-June.
Nonetheless, its guidance notes that the financial impact will linger longer, and ANA Holdings says it will “proactively mitigate” the financial impact from the conflict, which has driven jet fuel prices to record highs.
Immediate measures include revenue and cost management, the airline group states. From May, mainline operator ANA will “selectively” increase some of its fare – to cover an increase in operational costs.
Interestingly, the airline group also accounts for “demand softening” – especially in the six months to 30 September – as fares increase sharply. To this end, it expects a “temporary decline” in its half-year profit, with recovery to come the second half of the fiscal year.
“We will pay attention to trends in passenger and cargo demand due to the impact of the situation in the Middle East and strive to improve profitability by responding appropriately to changes,” the group states.
Like its peers in the region, ANA and JAL also saw some upside in the initial stages of the conflict, as airspace around key Middle East hubs like Doha and Dubai were shut.
Both carriers picked up spillover demand between Asia and Europe, traditionally a stronghold of the Middle East operators.
JAL, which was forced to suspend operations to Doha due to the conflict, adds that it was able to capture connecting demand between India and North America, which helped outweigh the losses from suspending its Middle East operations.
While this has translated to record full-year revenue for ANA Holdings, the group notes this has been offset by higher foreign exchange-related costs from the depreciation of the Japanese yen, as well as an increase in maintenance volumes.
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