Column  Finance and the Social Security System  2021.09.29

【Aging, safety net and fiscal crisis in Japan】No.328:Passenger railroad companies are in trouble due to the COVID-19 pandemic

In this column series, Yukihiro Matsuyama, Research Director at CIGS introduces the latest information about aging, safety net and fiscal crisis in Japan with data of international comparison

Healthcare COVID-19

Japanese railway companies can be roughly divided into Japan Railway companies (JR) and other railway companies. JR consists of six passenger railway companies and one freight railway company, which were established when the national railway was privatized in April 1987. The COVID-19 pandemic has reduced the number of working commuters and travelers, resulting in a 29.8% decrease in the total number of railway company users (from 25,190 million in FY2019 to 17,682 million in FY2020), as shown in Figure 1.

As a result, the total revenue of the six JR passenger railway companies decreased by 43.6% from JPY 6,927,366 million in FY2019 to JPY 3,908,666 million in FY2020 (Table 1). The reason why the rate of decrease in revenues far exceeded the rate of decrease in the number of users is that the number of tourist travelers and business travelers, who generally have high expenditure per person, fell sharply. The total operating profit of the six companies was a positive JPY 1,097,222 million in FY2019, but JPY -1,117,480 million in FY2020. As shown in Figure 2, the number of railway users has not recovered in 2021; this implies that the FY2021 financial results of passenger railway companies will continue to be in decline.

Figure 1: The number of annual railway users


Source: The Ministry of Land, Infrastructure, Transport and Tourism

Table 1: Financial data of JR companies           (JPY million)


Source: Financial Statements of JR companies

Figure 2: The number of monthly railway users


Source: The Ministry of Land, Infrastructure, Transport and Tourism