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ANA Expands European Routes Amidst Rising Post-Pandemic Travel Demand

The Japanese Airline Increases Flights to Europe, Capitalizing on Tourism Recovery and High International Fares
Japan
a 9202.TSE Mid and Small Cap 2000
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All Nippon Airways (ANA) is gearing up for a substantial expansion in its European operations in fiscal 2024, a strategic move to capitalize on the renewed post-pandemic demand for travel to Japan. The Japanese carrier plans to introduce three new routes from Tokyo to Milan, Stockholm, and Istanbul in the latter half of the fiscal year. These additions, initially delayed due to the pandemic, will increase ANA’s European destinations from five to nine.

Alongside these new routes, ANA is resuming its Haneda-Vienna service in August, marking the end of a four-year hiatus with three weekly round trips. Furthermore, the airline is set to enhance its frequency to Munich and Paris, offering seven flights per week to each city starting July. This expansion follows a recently established codeshare agreement with ITA Airways, Italy’s state-owned carrier.

ANA’s focus on Europe aligns with a rebound in inbound tourism to Japan. Despite the challenges posed by longer, more costly flights due to the need to avoid Russian airspace, the Japan National Tourism Organization reported an 8% increase in visitors in December 2023 compared to pre-COVID levels. While European visitors are still below pre-pandemic numbers, a significant recovery is anticipated.

In response to the growing inbound demand, ANA, like other Japanese airlines and travel companies, is shifting its focus from outbound Japanese travelers to attracting international tourists. This strategy is bolstered by the travel sector’s contribution to Japan’s balance of payments, which turned positive in 2015 and has been growing steadily.

Airlines like ANA are also benefiting from soaring international fares. In the first half of fiscal 2023, ANA reported a 68% increase in revenue per international passenger compared to the same period in 2019. With the weak yen expected to further boost travel to Japan, ANA is strategically positioning itself ahead of competitors by enhancing its European service offerings, anticipating a significant boost in earnings.

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