Japan Airlines said its net profit for the six months through September fell 42.2% to 39 billion yen, as its fuel bill rose 47.4% to 285.6 billion yen. ANA Holdings, the parent of All Nippon Airways, reported a smaller decline of 11.8%, to 67 billion yen. Both reported their results on Nov. 2, according to Jiji Press.

Passenger demand held up. ANA's sales were a record for the April-to-September period, carried by strong international travel, and JAL's revenue was its highest since the carrier returned to the stock market in 2012, Jiji reported. The profit hit came from jet fuel, which has been more expensive since tensions in the Middle East escalated this year. For travelers, the next step is already on the table: JAL plans to add a fuel surcharge to domestic fares.

JAL and ANA: Strong sales, thinner margins

The first-half figures follow a weak first quarter. In April to June, ANA's consolidated sales rose 22.6% to 672.7 billion yen while net profit fell 15.4% to 19.4 billion yen. JAL's sales rose 11.2% to 523.7 billion yen and its net profit dropped 80.2% to 5.35 billion yen, Jiji reported in August. Both airlines kept their full-year forecasts at that point.

Set against those first-quarter numbers, the half-year results imply a better July-to-September quarter for both carriers: about 47.6 billion yen of net profit at ANA and about 33.6 billion yen at JAL, based on the reported figures.

The full-year targets still ask a lot of the second half. When the fiscal year began, ANA Holdings forecast net profit of 96 billion yen for the year ending March 2027, down 43.2%, and said higher fuel would take about 60 billion yen off operating profit. JAL forecast 110 billion yen, down 20.1%, and estimated that fuel at elevated prices was costing it about 11 billion yen a month in the first quarter.

ANA has now booked about 70% of its annual profit target in six months. JAL has booked about 35%, so it needs roughly 71 billion yen in the October-to-March half to hit its number. JAL President Mitsuko Tottori said at a news conference that the airline could still meet its profit target if exchange rates and fuel prices stay at current levels, according to Jiji. The government plans to wind down its fuel subsidies gradually, which adds to the cost pressure.

A fuel surcharge on Japanese domestic flights

International tickets on both airlines already carry fuel surcharges, and JAL said when it issued its forecast in the spring that higher surcharges would offset the effect of the conflict involving Iran. Domestic tickets in Japan have no such charge. That is set to change.

Tottori said JAL aims to introduce a domestic fuel surcharge in April 2027 and expects to announce the details within this year, Aviation Wire reported from the Nov. 2 briefing. She described the domestic business as "very tough." Yuji Saito, the vice president who serves as group chief financial officer, said JAL needs to keep raising its average domestic fare.

JAL is also working with the government to adjust flight schedules on thin routes, and Tottori said the airline will look at cutting capacity as well. JAL and ANA began their first coordinated timetable, on the Haneda-Okayama route, on Oct. 25, according to Aviation Wire. Fewer flights and a new surcharge would both add to the cost of domestic travel next year.

The domestic market is consolidating. On Oct. 29, ANA Holdings signed a basic agreement to make Regional Plus Wings, the holding company for Air Do and Solaseed Air, a wholly owned subsidiary. Tottori declined to comment on the deal, calling it ANA's management decision, and said JAL is not currently considering any bid for Haneda Airport slots that might be redistributed as a result. She said JAL has no specific plans for closer ties with mid-sized carriers such as Skymark, but would consider cooperation where needed.

What it means for travelers and investors

The pattern matches the rest of the region. Chinese carriers have also carried more passengers while fuel ate into earnings: Air China's third-quarter profit fell 93% even as passenger numbers rose. Japan's two carriers are doing better because international demand has kept revenue growing.

For travelers, the near-term cost is in surcharges and fares, not seats. International surcharges change with jet fuel prices, while the domestic surcharge is new. For investors in JAL (9201) and ANA Holdings (9202), the second half depends on fuel, the yen and how quickly the subsidies are withdrawn. The next concrete date is JAL's announcement of how its domestic surcharge will work, due before the end of December.