Japan Airlines eyes growth amid robust tourism but faces economic headwinds

Macroeconomic factors will play a significant role in shaping Japan Airlines’ prospects for the rest of 2025. While inbound travel demand remains high due to strong tourist arrivals, changes in the value of the yen could impact this trend. If the yen strengthens over the next two quarters, inbound tourism may decline; conversely, a weaker yen could reduce business travel and outbound tourism from Japan.

Jet fuel costs remain a major concern for airlines globally. Although industry forecasts suggest that fuel prices may soften during the second half of 2025, any increase could negatively affect Japan Airlines’ financial performance.

Japan has set out plans for wider adoption of SAF with a goal of reaching a 10% blending mandate by 2030 despite higher costs associated with these fuels.

Investor sentiment toward Japan Airlines appears positive despite these challenges. "Investors, despite these potential risks, do appear to have confidence in the airline's prospects in the second half of the year," according to recent analysis included in Stock Analysis reports. "The airline's stock has provided investors with dynamic returns exceeding 25% over the past calendar year, mostly driven by waves of macroeconomic tailwinds."

During earlier periods marked by economic uncertainty following tariffs imposed under former President Trump’s administration, investor confidence dropped and shares traded at lower price-to-earnings multiples before rebounding later in summer trading sessions.

Despite overall optimism about future growth opportunities for Japan Airlines—one of only two large carriers alongside All Nippon Airways (ANA) in an otherwise slow-changing market—some portfolio managers continue short-selling due to concerns about broader macroeconomic instability or possible delays from aircraft manufacturers such as Boeing or Airbus.