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Pandemic-hit ANA expects record net loss of around 530 bil. yen

File photo shows all of the Nippon Airways Co. aircraft parked at Haneda Airport in March 2020. (Kyodo)

TOKYO – ANA Holdings Inc. is forecasting a record net loss of around 530 billion yen ($ 5 billion) and dropped about 30 large jets in the fiscal year ended March as the coronavirus pandemic battles demand for air travel, company sources said Wednesday .

The parent company of All Nippon Airways Co., which has so far withheld an earnings estimate this fiscal year, believes it will take some time for demand, especially for international flights, to recover due to the pandemic.

ANA will retire half of approximately 60 wide-body jets, including the rented ones, to drive costs down. They are less fuel efficient and require more maintenance costs compared to smaller aircraft.

The company said the number of passengers on its international flights fell 96 percent year over year in the five months to August after many countries around the world imposed travel restrictions.

Although the number of domestic passengers has gradually increased thanks in part to the government’s travel subsidy program, the International Air Transportation Association predicts that global air travel will not return to pre-pandemic levels until 2024.

The aviation company plans to announce its results for the first half of the current fiscal year through September and the outlook for the full year next Tuesday.

ANA will also unveil a plan to purchase 400 billion yen of subordinated loans from Japanese banks so the company can count some of the debt as capital, the sources said.

As part of an effort to get business going again, ANA has held talks with unions to reduce annual wages for its employees by around 30 percent. At the same time, consideration was given to selling unused assets and ceasing operations on unprofitable flight routes.

ANA posted a net loss of 108.82 billion yen for the April-June quarter.

Japan Airlines Co., another major Japanese airline, suffered a net loss of 93.71 billion yen from April to June and has not yet released a profit forecast for the current fiscal year through March.

Related reporting:

Virus Hit ANA to Acquire 400 Billion. Yen in loans to strengthen the capital base

ANA plans a 5% monthly wage cut as part of cutting costs amid a pandemic

ANA aims to enable employees to take on a wider range of part-time jobs in the context of a pandemic

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