Star Flyer Inc.

Business Details

The company operates an air transportation business (scheduled and non-scheduled passenger transportation, cargo transportation) and an ancillary business. It operates six domestic routes (Kitakyushu–Haneda, Kansai–Haneda, Fukuoka–Haneda, Fukuoka–Chubu, Yamaguchi Ube–Haneda, Fukuoka–Sendai) and secures a stable revenue base through codeshare arrangements with All Nippon Airways Co., Ltd. The company adopts a differentiation strategy positioned between LCCs and major carriers, offering all-leather seats and wider seat pitch. For FY2026 (ending March 2026), revenue was ¥44,795 million (up 4.4% year on year), and operating profit was ¥1,389 million (up 12.9% year on year).

Recent Overview

Revenue and operating profit increased, but a foreign exchange loss of ¥526 million significantly pressured ordinary profit

In FY2026 (ending March 2026), transportation results improved, with the number of passengers reaching 1,654 thousand (up 3.9% year on year) and the load factor rising to 81.6% (up 1.9 percentage points), driven by the new launch of the Fukuoka–Sendai route (October 2025) and the introduction of two new-model aircraft (A320neo). Operating profit increased to ¥1,389 million (up 12.9% year on year). On the other hand, a foreign exchange loss of ¥526 million arose from the yen's depreciation affecting foreign-currency-denominated lease obligations, resulting in ordinary profit of only ¥684 million (down 64.6% year on year) and net income of only ¥434 million (down 77.4% year on year). In addition, a change in the estimation method for the periodic maintenance provision (reflecting individual engine conditions and the latest contract unit prices) reduced operating profit and other items by ¥358 million. Lease assets increased by ¥8,160 million due to finance lease recognition associated with the introduction of new aircraft, expanding the interest-bearing debt balance to ¥10,820 million. For FY2027 (ending March 2027), the company forecasts revenue of ¥47,860 million (up 6.8% year on year) and operating profit of ¥660 million (down 52.5% year on year). Resumption of operations on the Kitakyushu–Taipei (Taiwan Taoyuan) route is planned from September 2026.

Key Products

Growth Drivers

• Expansion of the route network through the new launch of the Fukuoka–Sendai route (October 2025) and the planned resumption of the Kitakyushu–Taipei (Taiwan Taoyuan) route in September 2026
• Increased seating capacity and expanded available seat kilometers through the introduction of new-model aircraft (A320neo) (1,635 million seat-km, up 2.1% year on year)
• A stable revenue base through codeshare arrangements with All Nippon Airways Co., Ltd. (sales for the fiscal year of ¥17,468 million, 39.0% of net sales)
• Improvement in passenger numbers and load factor driven by the continued upward trend in air travel demand (1,654 thousand revenue passengers; 81.6% load factor)
• Mid- to long-term revenue expansion through execution of the "FY2026-FY2028 Medium-Term Management Strategy," with FY2027 (ending March 2027) as its first year
• Improved service quality through an increased flight punctuality rate of 99.7% (up 0.6 percentage points year on year) via the "ON TIME FLYER" initiative

Risks

• Risk of foreign exchange losses due to the yen's depreciation affecting foreign-currency-denominated lease obligations and periodic maintenance provisions (foreign exchange loss of ¥526 million in the current period; a ¥1 change in the yen-dollar exchange rate impacts ordinary profit by ¥70 million)
• Risk of increased fuel cost due to sharp fluctuations in crude oil prices (a $1 per barrel change impacts fuel cost by ¥38 million)
• Risk of changes in estimates for the periodic maintenance provision (a change in the estimation method due to rising maintenance costs and an increasing number of new aircraft reduced profit by ¥358 million in the current period)
• Significant increase in interest-bearing debt balance (¥10,820 million) and increased financial burden due to finance lease recognition associated with the introduction of new aircraft
• Impact on passenger unit prices and load factor due to intensifying competition with LCCs, major airlines, and the Shinkansen, among others
• Risk of earnings deterioration, with the FY2027 (ending March 2027) earnings forecast projecting a significant decline in operating profit of 52.5% year on year (¥660 million)
• Risk of increased operating costs and demand uncertainty associated with the resumption of international flight operations (Kitakyushu–Taipei route)