American Airlines scores big as US-Japan travel hits new highs this summer

This summer, travel between the US and Japan is experiencing a significant surge, providing a much-needed boost to American airlines amid a slump in domestic flight demand. 

As more Americans take advantage of lower airfares and a favorable exchange rate, Japan is quickly becoming one of the hottest international destinations. This growth in transpacific travel is helping major carriers offset revenue losses from declining US domestic bookings, marking a rare bright spot in an otherwise challenging market, Caliber.Az reports via Bloomberg.

According to aviation data firm OAG, over 1.5 million seats are planned for US-Japan flights during June through August—a 6.4 per cent increase from last year. Tokyo ranks just behind London and ahead of Paris among the most popular summer destinations on Kayak.

“Trips to Japan are really in fashion right now,” United Airlines Chief Commercial Officer Andrew Nocella told Bloomberg Television, calling Japan one of the airline’s “hottest destinations.” He added, “Everybody is trying to take the family to Japan. I’m not sure we’ll have enough seats, to be frank.”

United leads US carriers in flights and passengers to Japan, but American Airlines and Delta have also boosted capacity to meet growing demand. These international routes are helping US airlines offset revenue losses from a slump in domestic travel earlier this year.

Trips to Japan have become more affordable due to lower airfare and a stronger dollar against the yen. Conor Cunningham, analyst at Melius Research, said, “If they’re looking for value, given where currency is on the yen side, going to Japan right now makes a lot of sense.”

The yen has dropped sharply over four years, nearing a 40-year low. This shift has reduced Japanese outbound travel but increased Americans’ spending power. Currently, $1,000 exchanges for nearly 146,000 yen, up from about 108,000 yen in June 2019.

John Grant, chief analyst at OAG, noted, “It can make a huge difference to the demand for a destination.”

US visitors to Japan increased nearly 30 per cent through May compared to last year, while Japanese travel to the US rose just 3.5 per cent, according to official data.

Though US-Japan traffic remains below pre-pandemic levels, it has rebounded quickly over two years, helping carriers as US domestic bookings struggle amid economic uncertainty and trade tensions.

Meanwhile, the post-pandemic US travel surge to Europe is slowing, with flight capacity to Great Britain and Germany declining. This shift is boosting interest in destinations like Tokyo.

As Peter Vlitas of Internova Travel Group said, “People are saying, ‘I did Europe, now I want to do something different.’ And there are a bunch of new travelers who want to go there and it’s driven by the strength of the dollar.”

American Airlines is increasing seats by 11 per cent on Dallas-Fort Worth to Tokyo routes and added a New York-Haneda flight. Delta expanded seats nearly 7 per cent, while United holds capacity steady despite a 15 per cent booking rise.

Lower fares have encouraged more Americans to travel to Japan. Kayak reports long-haul Asia fares are 11 per cent below last summer.

This influx of US travelers is offsetting a sharp decline in visitors from nearby Asian countries like Taiwan, South Korea, and Hong Kong, where bookings have dropped significantly due in part to fears of a potential natural disaster in Japan.

Despite yen-related challenges, Japanese travelers continue flying to the US with flights maintaining high load factors, though outbound numbers remain below pre-pandemic levels.

By Naila Huseynova