Japanese airlines’ mileage businesses are facing a key test as a surge in global oil prices drives up the real cost of award tickets and pushes carriers to tighten program rules.
According to the Nikkei business daily, All Nippon Airways and Japan Airlines sharply raised international fuel surcharges for tickets issued starting May 1, after jet fuel prices jumped following the effective closure of the Strait of Hormuz. On one-way flights from Japan to Europe, ANA raised its surcharge from 31,900 yen to 56,000 yen, while JAL lifted its fee from 29,000 yen to 56,000 yen. Some routes saw increases close to double.
The higher charges also hit travelers using miles. For example, a June round-trip economy award ticket between Tokyo and London previously required about 55,000 miles plus about 100,000 yen in additional payments, but now requires about 150,000 yen. Even with miles, the cash outlay has risen sharply, weakening the appeal of “bonus” tickets.
Mileage programs were designed to secure loyal customers, expanding rapidly after their introduction in the 1990s by allowing points earned from flight distance to be redeemed for tickets. ANA surpassed 10 million members within seven years of launching its program. Over time, miles became a broader revenue model tied to finance and retail, as card and insurance companies bought miles to offer as customer perks and more consumers accumulated miles without flying.
For airlines, mileage operations can be a high-margin business: miles sold externally trade at higher prices than general-purpose points, while redemptions are concentrated on the airline’s own tickets. JAL’s mileage, card and other businesses in finance and e-commerce posted EBIT of 45.5 billion yen for the fiscal year ended March 2026, about 20% of the total. The segment’s profit margin was 20%, far above the airline’s core aviation business at 9%.
Still, the model is harder to sustain if earning grows while redemption becomes more difficult. Complaints have risen that seats are hard to book even with miles, as award inventory has tightened, especially in business and first class. With fuel surcharges also climbing, Nikkei said the perceived value of miles is falling quickly.
Airlines are responding. ANA said it will tighten requirements for premium member card benefits starting in fiscal 2028, restricting some perks such as lounge access if annual spending via ANA cards and smartphone payments falls below 3 million yen. Previously, once status was obtained, members could keep benefits by paying the annual fee; the new structure will require a minimum level of spending. The change is expected to affect Japan’s culture of pursuing elite status, often referred to domestically as “mile runs.”
Carriers are also continuing to expand ways to earn miles. JAL recently invested in online life insurer Lifenet Insurance and said it will consider developing insurance products that accrue miles. But industry observers warn that expanding earning opportunities may have limited pull if redemption value keeps eroding.
The central challenge, the report said, is restoring the value of using miles. Airlines are considering broader redemption options, including low-cost carriers and non-aviation services, but the report said there is no fundamental solution without making award tickets attractive again. With oil prices adding pressure, Japan’s airline mileage businesses built over more than three decades are at a structural turning point.
* This article has been translated by AI.
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