BREAKING NEWS: ANA to retire half of 60 wide-body jets due to weak demand
TOKYO – ANA Holdings Inc. is expecting to book a record net loss of around 530 billion yen ($5 billion) for the business year through next March as the coronavirus pandemic hits air travel demand hard, company sources said Wednesday.
The parent of All Nippon Airways Co., which has withheld an earnings guidance so far this business year, believes it will take some time for demand, particularly for international flights, to recover due to the pandemic, the sources said.
The company said the number of passengers for its international flights plunged 96 percent in the five months through August from a year earlier after many countries around the world imposed travel restrictions.
Even though the number of domestic flight passengers has been gradually increasing partly thanks to the government’s travel subsidy program, the International Air Transportation Association expects that global air traffic will not return to pre-pandemic levels until 2024.
The aviation company plans to announce next Tuesday its earnings results for the first half of the current business year through September and outlook for the full-year earnings.
ANA will also unveil a plan to acquire 400 billion yen in subordinated loans from Japanese banks, allowing ANA to count part of the debt as capital, the sources said.
As part of efforts to turn around its business, ANA has been in talks with labor unions to cut annual pay for its employees by around 30 percent, while considering selling unused assets and suspending operations on unprofitable flight routes.
ANA logged a net loss of 108.82 billion yen in the April-June quarter.
Japan Airlines Co., another major Japanese carrier, incurred a net loss of 93.71 billion yen in the April-June period and has yet to release an earnings forecast for the current business year to March.