Japan has become a hot tourist destination this year. Overseas visitors to the country reached a historic high in March as they flocked to the country attracted by a cheap currency. The Japanese yen fell to its weakest level against the dollar in 34 years last month. Yet local airline stocks are not enjoying the boom.
The rebound in travel, with a record 3.1mn visitors in March, has boosted tourism spending to a quarterly record this year and is helping the Japanese government get closer to its goal of ¥15tn ($96bn) in annual tourism spending by 2030. For airlines, demand for international cargo and flights is starting to recover, with the weak yen further boosting profits for sales made in foreign currencies.
Japan Airlines expects sales to grow 17 per cent and its group net profit to rise 5 per cent to ¥100bn for the year to next March. This would be JAL’s first time since fiscal 2018 at that level. It is working to expand group-wide international capacity, with North America one of its focus areas. But the country’s airline shares do not reflect this brighter outlook.