Asian Airlines Regain Profitability and Pin Hopes on China’s Travel Recovery
Three major airlines in Asia have bounced back from the challenges of the pandemic and are optimistic about the potential growth in China’s travel market. Singapore Airlines achieved a record net profit of 2.16 billion Singapore dollars ($1.61 billion) for the financial year ended March, marking its highest-ever profit in its 76-year history. All Nippon Airways (ANA) also returned to profitability, reporting a net profit of 89.4 billion yen ($650.3 million) for the year ended March, surpassing its pre-pandemic levels. Similarly, Japan Airlines saw a significant turnaround, posting a net profit of 34.4 billion yen for the financial year ended March.
The three airlines are eyeing China as a crucial driver for their future growth. Singapore Airlines reported robust travel demand from March to June, with strong bookings to China, Japan, and South Korea. ANA expects further growth in the international segment due to eased restrictions on China routes, while Japanese tourists and the recovery of Chinese tourism are anticipated to positively impact their earnings. Korean Air also anticipates a boost in Chinese travel as restrictions on group travel are lifted, and transit passengers from the Americas heading to China are expected to benefit the airline.
While the aviation industry is improving rapidly, with easing activity restrictions for domestic flights and lifted entry restrictions for international flights, the recovery from Europe and China still lags behind. However, the airlines remain optimistic about the summer season and foresee a rapid recovery in global passenger demand in the coming months. Despite a decline in net profit for the first quarter of 2023, Korean Air reported a significant year-on-year increase in full-year net profit for the financial year ended December.
In summary, these Asian airlines have experienced a remarkable rebound, with record profits and a strong focus on China’s reopening as a key market for their future success.