JAL, ANA Cater to Elite Frequent-Fliers to Shore Up Profits

Japan Airlines (JAL) and All Nippon Airways (ANA) are focusing on their elite frequent-flier programs to enhance profitability. As domestic flights have become less profitable due to increasing fuel and maintenance expenses, the airlines aim to retain high-value customers who contribute significantly to ancillary revenue streams.

This month, JAL revamped one of its domestic lounges at Haneda Airport's Terminal 1, increasing seating capacity by 40%, adding private rooms for online meetings, and installing tall sofas to minimize view interference.

JAL's executive officer, Junko Sakihara, mentioned that they plan to expand their service offerings to cater to diverse needs, aiming to grow their customer base. In the coming year, JAL intends to ease credit card program membership requirements for joining its JAL Global Club, which provides lounge access, to attract new customers.

ANA requires members to join the ANA Super Flyers credit card program or fly a certain number of flights to attain elite status. Currently, membership has risen 50% from pre-pandemic levels, leading to concerns about service quality deterioration due to overcrowding. In April, ANA announced that members with annual credit card spending below ¥3 million would be barred from accessing domestic lounges, with certain exceptions.

The policy was revised following customer backlash, allowing broader access when lounges are not crowded. ANA now intends to introduce an advance reservation system to manage overcrowding issues.

The competition to attract elite members intensifies due to the changing landscape of the core airline business. Rising maintenance costs, including higher labor expenses and geopolitical tensions causing fuel price volatility, negatively impact profitability, especially in domestic flights. Meanwhile, non-aviation businesses, such as financial services and lifestyle sectors like electricity and gas, have remained stable, even during the COVID-19 pandemic.

As traditional competitors focus on routes and passengers, JAL and ANA are now emphasizing securing customers who can stabilize profits across various business domains.