With foreign visitors flocking to Japan and its flag carrier Japan Airlines (JAL), the yen’s unrelenting decline has been a double-edged sword for the country and its citizens, who are delaying travel abroad.
Due to a weak currency and inflation, JAL’s outbound numbers have remained unimpressive, with demand at roughly half of pre-pandemic levels, according to the airline’s managing executive officer, Ross Leggett.
The yen’s value relative to the US dollar has been close to historic lows, which has increased the airline’s fuel and operating expenses.
“We pay all of our aircraft expenses in US dollars. Thus, the weakening yen significantly raises our costs, Mr. Leggett said to CNA’s Roland Lim during the World Air Transport Summit and the International Air Transport Association’s (IATA) Annual General Meeting in Dubai.
March saw over 3 million tourists arrive in Japan—a record high for a single month—thanks to the country’s picturesque cherry blossom season. Per Mr. Leggett, most visitors came from Asia and North America.
With its revenue rising by roughly 20% year over year, JAL’s earnings and revenues saw a remarkable turnaround last year compared to pre-pandemic 2019 levels, driven by the spike in international passengers.
JAL and IndiGo, an Indian low-cost airline, announced a code-share agreement to sell tickets on each other’s flights during the summit.
