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▼ Japan’s ANA to Introduce Fuel Surcharges to Domestic Flights from Fy27, Driven by Rising Fuel Costs, Declining Profits
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All Nippon Airways Co. (ANA) is considering the introduction of aviation fuel surcharges that would be added to airfares in accordance with fuel costs to domestic flights from fiscal 2027.
Due to worsening situation in the Middle East, fuel prices are surging. ANA has determined that rising costs would lead to a major decrease in its earnings unless those costs are passed on via airfares.
Since a greater burden on passengers may result in people flying ANA less often, the company is cautiously planning how to design the fare structure.
Fuel surcharges will be added to airfares for all the domestic routes. The calculation method and the timing to introduce the surcharges will be discussed henceforth. Introducing the new system is likely to take some time.
ANA introduced fuel surcharges to international flights in 2005. On Monday, the company announced that it will considerably increase the surcharges for international flights booked from May, to pass on the rising fuel costs.
Domestic flight routes are relatively short, which means the ratio of the fuel surcharge to the operation cost is small.
That is why ANA has not introduced fuel surcharges to domestic flights. Due to the rising fuel costs, however, Koji Shibata, the president of ANA’s parent company, ANA Holdings Inc., revealed on April 1 that the company would discuss various possibilities, including whether it should include fuel surcharges to domestic flights.
Currently, Fuji Dream Airlines Co. in Shizuoka is the only airline in Japan that has introduced fuel surcharges to domestic flights. The company has raised the surcharges for flights booked in May.
The increased surcharge for flights between Nagoya and Yamagata, Kochi and other cities is ¥2,800, four times higher than the previous month. Japan Airlines Co. and Skymark Airlines Inc. are set to introduce fuel surcharges to domestic flights in the spring of 2027.
In recent years, revenue from domestic flights has been declining due to the rise in personnel costs and maintenance charges caused by price surges and a weak yen.
According to the Land, Infrastructure, Transport and Tourism Ministry, the domestic flight business of six major airline companies, including ANA and JAL, would have been effectively in the red in the business year ending in March 2025 if they had no public financial support, such as a reduction or exemption of airport fees. Surging fuel costs will further add to those headwinds.
“I hear they are in a situation in which they have no choice but to consider raising airfares or taking other measures,” said Land, Infrastructure, Transport and Tourism Minister Yasushi Kaneko at a press conference after a Cabinet meeting on Tuesday when asked about the time frame for when airlines would introduce fuel surcharges to domestic flights.
Due to worsening situation in the Middle East, fuel prices are surging. ANA has determined that rising costs would lead to a major decrease in its earnings unless those costs are passed on via airfares.
Since a greater burden on passengers may result in people flying ANA less often, the company is cautiously planning how to design the fare structure.
Fuel surcharges will be added to airfares for all the domestic routes. The calculation method and the timing to introduce the surcharges will be discussed henceforth. Introducing the new system is likely to take some time.
ANA introduced fuel surcharges to international flights in 2005. On Monday, the company announced that it will considerably increase the surcharges for international flights booked from May, to pass on the rising fuel costs.
Domestic flight routes are relatively short, which means the ratio of the fuel surcharge to the operation cost is small.
That is why ANA has not introduced fuel surcharges to domestic flights. Due to the rising fuel costs, however, Koji Shibata, the president of ANA’s parent company, ANA Holdings Inc., revealed on April 1 that the company would discuss various possibilities, including whether it should include fuel surcharges to domestic flights.
Currently, Fuji Dream Airlines Co. in Shizuoka is the only airline in Japan that has introduced fuel surcharges to domestic flights. The company has raised the surcharges for flights booked in May.
The increased surcharge for flights between Nagoya and Yamagata, Kochi and other cities is ¥2,800, four times higher than the previous month. Japan Airlines Co. and Skymark Airlines Inc. are set to introduce fuel surcharges to domestic flights in the spring of 2027.
In recent years, revenue from domestic flights has been declining due to the rise in personnel costs and maintenance charges caused by price surges and a weak yen.
According to the Land, Infrastructure, Transport and Tourism Ministry, the domestic flight business of six major airline companies, including ANA and JAL, would have been effectively in the red in the business year ending in March 2025 if they had no public financial support, such as a reduction or exemption of airport fees. Surging fuel costs will further add to those headwinds.
“I hear they are in a situation in which they have no choice but to consider raising airfares or taking other measures,” said Land, Infrastructure, Transport and Tourism Minister Yasushi Kaneko at a press conference after a Cabinet meeting on Tuesday when asked about the time frame for when airlines would introduce fuel surcharges to domestic flights.
- 22/4 21:43
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