Deterioration in the Economic Environment Associated with the Kumamoto and Oita Earthquakes, Terrorism and the UK's Withdrawal from the EU

「Persistently high raw material prices and increases in logistics and labor costs caused by labor shortages continue to affect prices overall, including construction and repair costs. In addition, we continue to monitor developments in financial and capital markets and the situation in the Middle East.」

「Regarding our group's business environment during the consolidated fiscal year (1 April 2025 to 31 March 2026), the aviation industry had remained firm, supported by inbound demand, but the outlook is becoming increasingly uncertain due to the situation in the Middle East. In addition, soaring raw material prices and higher logistics and labor costs caused by labor shortages are affecting prices overall, including construction costs. Further, continued caution is required regarding the impact of volatility in financial and capital markets and developments surrounding US trade policy.」

「During the interim consolidated accounting period (1 April 2025 to 30 September 2025), our group's business environment remained strong in the aviation industry, supported by robust inbound demand despite an unstable global situation. Meanwhile, soaring raw material prices and higher logistics and labor costs caused by labor shortages are affecting prices overall, including construction costs. In addition, caution is required regarding the impact of an economic downturn resulting from US trade policy and volatility in financial and capital markets.」

「During the interim consolidated accounting period (1 April 2024 to 30 September 2024), our group's business environment has remained strong, supported by robust inbound demand in the aviation industry despite challenging conditions such as the weak yen and high prices. Meanwhile, soaring raw material costs and higher logistics and labor costs caused by labor shortages are affecting prices, including construction costs, while the escalating situation in the Middle East and unstable movements in financial markets mean that continued caution is required.」

「Meanwhile, volatility in foreign exchange markets, inflation, concerns over the outlook for the Chinese economy and escalating tensions in the Middle East pose risks of putting downward pressure on Japan's economy, requiring continued caution.」

「Meanwhile, rising prices resulting from fluctuations in foreign exchange rates and persistently high energy prices, as well as the worsening situation in the Middle East, pose risks that could weigh on the Japanese economy, and the situation continues to require close attention.」

「Meanwhile, as the downturn in overseas economies against a backdrop of global monetary tightening and other factors poses a risk of putting downward pressure on Japan's economy, the Bank of Japan's partial modification of its monetary easing policy means that continued caution is required regarding the impact on inflation, supply-side constraints and volatility in financial and capital markets.」

「Meanwhile, as concerns persist over the prolonged situation in Ukraine and the impact of restrictions on economic activity in China, among other factors, rising raw material prices and the rapid depreciation of the yen mean that caution is required regarding downside risks to the economy.」

「In fiscal 2021, Japan's economy was affected by a decline in personal consumption due to the spread of COVID-19. Although signs of recovery have recently emerged, GDP remained below its pre-COVID level and the recovery was limited to a gradual pace. Amid uncertainty related to the situation in Ukraine and other factors since late February 2022, attention is required regarding downside risks from rising raw material prices and other factors.」

「Subsequently, the new Omicron variant spread rapidly worldwide, and the number of infections in Japan surged from the beginning of the year. The government strengthened border controls, while also promoting booster vaccinations, the use of oral medications and other measures based on the characteristics of the Omicron variant, in efforts to contain infections while maintaining social and economic activity.」

「During the cumulative six-month period, Japan's economy showed some signs of recovery but remained in a difficult situation due to the renewed spread of COVID-19. The fourth state of emergency, declared in July, was repeatedly expanded and extended amid explosive growth in infections from late July through early September. The Olympics and Paralympics were held with almost no spectators, limiting their economic impact, while services and travel remained weak.」

「During the cumulative three-month period, Japan's economy showed some signs of recovery, but remained in a difficult situation due to the renewed spread of COVID-19. The third state of emergency, declared in Tokyo and the Kansai region in late April 2021, was extended and expanded before being lifted in late June in 9 prefectures, excluding Okinawa. During this period, personal consumption remained weak, particularly spending on services such as travel and dining out.」

「During the cumulative nine-month period, Japan's economy remained in an unprecedented downturn amid successive waves of the global spread of COVID-19 that began at the start of 2020. New infections surged from November, particularly in the Tokyo metropolitan area, and a state of emergency was reissued in early January 2021 for Tokyo and the three surrounding prefectures. Additional municipalities were subsequently included, leaving the situation unpredictable.」

「Looking ahead, concerns remain about the impact on Japan's economy from the still uncertain future of US–China trade friction, China's economic slowdown, the delayed improvement in Japan–South Korea relations, rising tensions in the Middle East associated with the escalating US–Iran confrontation, and the spread of the novel pneumonia originating in China.」

「Looking ahead, concerns remain about the impact on Japan's economy from the still uncertain future of US–China trade friction, China's economic slowdown, the delayed improvement in Japan–South Korea relations, rising tensions in the Middle East associated with the escalating US–Iran confrontation, and the spread of the novel pneumonia originating in China.」

「Repeated typhoons and other natural disasters in Japan also resulted in weakness in exports and production.」

「Looking ahead, concerns remain about the impact on Japan's economy due to US–China trade friction, a slowdown in China's economy, rising tensions in the Middle East resulting from the US–Iran confrontation, and worsening Japan–South Korea relations.」

「Looking ahead, concerns remain about the impact on Japan's economy due to uncertainty over the outlook for US–China trade negotiations and a slowdown in China's economy, as well as uncertainty and economic slowdown in Europe's political and economic environment and other risks to the global economy.」

「However, toward the end of the year, uncertainty over the US economy and monetary policy caused turmoil to spread through financial markets, while Japan also saw stock market declines and movement toward yen appreciation. There were also concerns about the impact on Japan's economy amid uncertainty over the outlook for US–China trade negotiations and expectations of economic slowdowns in Europe and China.」

「In early September, Kansai International Airport was damaged by Typhoon No. 21, followed by damage to New Chitose Airport from the Hokkaido Eastern Iburi earthquake. Airlines, including those operating at both airports, cancelled flights in succession, and the impact on tourism, cargo services and other operations continued.」

「As protectionist moves by the United States intensify, international political and economic affairs are becoming increasingly unsettled, and global uncertainty continues due to rising crude oil prices and interest rates and fluctuations in foreign exchange markets, raising concerns about the impact on Japan's economy. The recent northern Osaka earthquake and heavy rains in western Japan may also affect domestic routes and inbound tourism demand.」

「Amid turmoil in international political and economic affairs, global uncertainty continues, including fluctuations in crude oil prices, interest rates and foreign exchange markets, raising concerns about the impact on Japan's economy.」

「However, global uncertainty is increasing due to the future direction of US policy, fluctuations in interest rates and foreign exchange markets, successive terrorist attacks and turmoil in the Middle East, raising concerns about the impact on Japan's economy. Against this economic backdrop, the consolidated results of our group, comprising the Company and its consolidated subsidiaries, were as follows. Supported by steady sales at Tokyo International Airport and other factors, revenue for the cumulative nine-month period was ¥16,992 million, up 5.0% year on year; operating income was ¥3,215 million, up 3.3%; ordinary income was ¥2,967 million, unchanged year on year, partly due to foreign exchange valuation losses overseas; and profit attributable to owners of the parent was ¥1,767 million, down 4.7%.」

「However, amid continued unsettled weather and frequent natural disasters both in Japan and overseas, global uncertainty is increasing due to the future direction of US policy, fluctuations in interest rates and foreign exchange markets, successive terrorist attacks, turmoil in the Middle East and rising tensions surrounding North Korea, raising concerns about the impact on Japan's economy. Against this economic backdrop, the consolidated results of our group, comprising the Company and its consolidated subsidiaries, were as follows. Supported by steady sales at Tokyo International Airport and other factors, revenue for the cumulative six-month period was ¥11,420 million, up 5.3% year on year; operating income was ¥2,171 million, up 6.1%; ordinary income was ¥2,049 million, down 2.0%, partly due to foreign exchange valuation losses overseas; and profit attributable to owners of the parent was ¥1,218 million, down 3.4%.」

「However, global uncertainty is increasing, including the future direction of US policy, fluctuations in interest rates and foreign exchange markets, the course of negotiations over the UK's withdrawal from the EU, successive terrorist attacks, turmoil in the Middle East and rising tensions surrounding North Korea, raising concerns about the impact on Japan's economy.」

「However, uncertainty is increasing worldwide, including possible changes in US economic and foreign policy, the course of negotiations over the UK's withdrawal from the EU, and the spread of terrorism in the Middle East, creating uncertainty around Japan's economic recovery.」

「During the second quarter of fiscal 2016, Japan's economy continued to operate under the Bank of Japan's negative interest rate policy introduced in late January. Although income and employment conditions showed moderate improvement, the recovery in Japan's economy appeared to stall amid the Kumamoto earthquake in April, the effects of numerous floods and other weather-related disasters during the summer, the slowdown in China's economy, repeated terrorist attacks in Europe, and volatility in financial and capital markets associated with the UK's move to leave the EU.」

「In Japan, the Kyushu economy stagnated following the Kumamoto–Oita earthquakes in mid-April. In addition to the disruption caused worldwide by repeated terrorist attacks, the movement toward the UK's withdrawal from the EU in mid-June led to further yen appreciation and stock market declines, and Japan's economic recovery also showed signs of stalling.」