April 27, 2018 / 7:16 AM / a month ago

REFILE-UPDATE 1-Japanese airlines ANA, JAL post higher annual profits but warn earnings stagnating

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* ANA operating profit rises 13 pct, FY19 forecast flat

* JAL operating profit up 2.5 pct, FY19 forecast down 4.3 pct

* International tourism boom aiding demand - airlines

By Sam Nussey

TOKYO, April 27 (Reuters) - Japan’s largest airlines, ANA Holdings Inc and Japan Airlines Co Ltd (JAL), reported higher annual operating profits on Friday due to strong passenger demand but warned earnings momentum was stagnating.

Both airlines have benefited from a boom in tourism as the nation attracts more Asian travellers, but like their international rivals, the carriers face a rising fuel price that could crimp margins.

ANA, the larger airline by sales, posted a 13 percent rise in operating profit to 164.5 billion yen ($1.51 billion) for the financial year ended March 31, in line with analyst estimates, on the back of robust demand for international passenger and cargo flights.

ANA said it expects operating profit for the year ending March 31, 2019 to be flat at 165 billion yen. It did not provide an explanation for the outlook, although it said the global economy was expected to continue a gradual recovery.

JAL posted a 2.5 percent rise in full year operating profit to 174.6 billion yen, in line with analyst estimates.

The results were helped by strong demand from travellers, but JAL said revenue per passenger in the domestic market fell due to competition from other airlines.

JAL forecast operating profit to fall 4.3 percent to 167 billion yen in the financial year ending March 31, 2019 due to rising costs including fuel, depreciation and maintenance.

“We will strive to improve cost management from a medium- to long-term perspective,” JAL said in a statement.

Both airlines have hedged portions of their exposure to the oil price. ($1 = 109.2400 yen) (Reporting by Sam Nussey in Tokyo; additional reporting and writing by Jamie Freed in Singapore; editing by Darren Schuettler)

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