Besides ANA and JAL, the third publicly traded Japanese airline – StarFlyer – has released its financial results for the first half of fiscal year 2019 as well.
Just like the other two airlines, StarFlyer has reported a modest year-over-year growth in revenues that did not translate into profit growth.
StarFlyer H1 FY2019 Financial Results
In the first six months of this fiscal year – between April 1, 2019, and September 30, 2019 – StarFlyer recorded revenues of 20.24 billion yen (1 US dollar = about 108 yen). This represents a 3.7% growth compared to the 19.5 billion yen the airline turned over in the first half of FY2018.
Unlike ANA and JAL which reported an uptick in their revenues from domestic services, StarFlyer recorded a 1.3% drop year-over-year.
However, that drop was more than compensated for by the 1.1 billion yen that the airline’s international services brought in. The airline launched its two current international routes, Kitakyushu – Taipei and Nagoya – Taipei, back in October 2018.
In H1 FY2019, 30% of StarFlyer’s revenues came through the sales channels of its largest shareholder, ANA. That’s two percentage points less than in H1 FY2018.
Available seat kilometers increased 16.8% YOY to 1.18 billion in H1 FY2019. In the same period, the airline transported 862 thousand passengers, a 8.7% increase YOY.
Despite the modest but noticeable revenue growth, StarFlyer recorded just 740 million yen in operating profit in H1 FY2019, a significant 25.5% decrease compared to the same period last year.
The airline reported a 14% increase in fuel-related expenses and an 11% increase in aircraft-related expenses compared to H1 FY2018. That’s, in part, due to the airline growing its fleet by two A320s since then.
While the above is partly responsible for StarFlyer’s reduced profitability, the year-over-year decrease of load factor from 75.6% to 74.3% and a decrease in yield are to blame as well.
StarFlyer’s Forecast for FY2019
The airline is more or less on target to hit the 42.4 billion yen forecasted for full FY2019. It is also, in spite of its significantly worse performance than in the first half of FY2018, well on track to hit its conservative forecast of 1.1 billion yen in operating profit for the year.
As such, unlike ANA and JAL both of which lowered their forecast in one way or another when announcing the interim results, StarFlyer has decided to to revise its forecast for FY2019.
Summary
Unlike ANA and JAL, StarFlyer recorded a drop in its domestic business in spite of this year’s prolonged Golden Week holiday period. Year-over-year, it was able to make up for that revenue loss with its new international flights to Taipei, though.
For a number of factors including higher fuel- and aircraft-related costs and a decrease in both load and yield on the revenue side, the airline’s revenue growth didn’t translate to operating profit growth. Quite to the contrary, StarFlyer reported a 25.5% year-over-year drop in that metric.
That said, considering that its forecast was fairly conservative, it is still well on track to hit its targets in FY2019 – both revenue- as well as profit-wise.
