Aviation

Border reopening a relief for Japanese majors but weak outbound travel remains concern | News

Japan’s two largest carriers are seeing a healthy boost in inbound travel demand following the country’s decision to ease travel restrictions a month ago, though they warn that China’s continued closure and economic headwinds will remain challenges.

Speaking to FlightGlobal at the Association of Asia Pacific Airlines (AAPA) Assembly of Presidents in Bangkok, senior executives from Japan Airlines and All Nippon Airways noted a “surprising” spike in forward bookings immediately after the reopening was announced.

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Japan fully swung open its borders on 11 October, doing away with restrictions such as pre-departure testing and quarantine for fully-vaccinated travellers.

Executive vice president at JAL Shimizu Shinichiro says forward bookings increased three-fold in the week following the announcement.

As for ANA, forward bookings for flights to Japan spiked five times week on week and remain strong, according to international affairs and alliances executive vice-president Jun Miyagawa, who calls the increase “surprising”.

Consequently, the two carriers have adjusted upwards their international capacity projections, to about 60% by end-March 2023, which is the end of the current financial year.

A weaker Japanese yen is a double-edged sword for both carriers, the executives concede, with Japan an attractive – and more affordable – destination for inbound travellers, but with outbound leisure travel still in the doldrums.

ANA’s Miyagawa adds: “I think that Japanese people are still very cautious about going overseas.”

An area of network opportunity has been flights to North America; JAL’s route marketing deputy senior vice-president Ross Leggett says the Oneworld carrier’s capacity into North America is already 15% higher than pre-pandemic levels.

ANA, meanwhile, is closing in on a full recovery on its North America network.

The demand is largely driven by transit traffic to and from other parts of Asia, especially iSoutheast Asia, both executives note.

THE CHINA CLOSURE CONSEQUENCE

On the other hand, JAL and ANA were both aware their large exposure to the Chinese market pre-pandemic meant their recovery would be slowed by the Mainland’s slower reopening.

Miyagawa says pre-pandemic, ANA’s Chinese passenger numbers – including Hong Kong – accounted for about 25% of overall passengers. Revenue, meanwhile, was a significant 15%.

Leggett adds that JAL is only operating only around 15% of the number of weekly flights into China compared to pre-pandemic 2019.

While there was relief at measures – announced by China on 11 November – to tweak some travel curbs, the executives point out that a full reopening will likely take some time.

China remains the last major economy to be largely shut out to international travel, thanks to its ‘zero-Covid’ policy. Despite eliminating a penalty system that punishes airlines for carrying passengers with Covid-19, the country has not adjusted upwards the number of international flights allowed in.

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