Air Transport World

All Nippon's international - growth barriers. (All Nippon Airways Company Ltd.; includes related article on the delivery of Boeing 747-400D) (Company Profile)

After an impressive charge out into the international airline arena, opening service on 20 international routes in just over five years, All Nippon Airways has reached a leveling-off point, a pause, if you will. On the positive side, the world's eighth-biggest passenger-carrying airline has found some breathing space for severe challenges coming up in the next few years. ANA had a very good year in the financial period ended March 31, exceptionally good and considering what the rest of the airlines around the world did. The fledging international operation showed an RPK increase of more than 40% to over 9.3 billion and passenger boardings were up 15% to 1.4 million. But overall profits were down dramatically and ANA officials are fearfully that if the new international system cannot be "fleshed out" to daily service that profits will be difficult to obtain.

The pause has not come voluntarily--it was caused by world events, the Gulf War and the troubling signs in the economy. But most of all, severe limits were imposed on airline growth by Japan's woefully inadequate air-service infrastructure.

ANA was not hurt severely by the war, which depressed airline operations in many parts of the world. About 85% of ANA's revenue still comes from its huge domestic operation. Traffic remained good in Japan during the crisis and fuel prices did not increase much.

As a result, ANA is showing a 4% increase in domestic boardings, with 33.5 million passengers carried in its 1991 fiscal year that ended March 31.

On the down side, ANA is expected to show a 9.9% increase in its operating revenue for the year to 806 billion yen ($6.2 billion) when the final figures are released. But operating income is expected to be well below the $215 million projected earlier, even well below the $194 million enjoyed in fiscal '90. Net also is expected to be down though no loss such as the one expected at rival Japan Airlines, which must rely more on the shaky international market for its revenues. Despite the disappointing result, ANA still is one of the few major airlines to show profits for both of the Gulf War and recession years. Again, ANA officials attribute this to the airline's strong domestic base, with 33.5 million passengers in 35[cent]-per-mile yield markets. …

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