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Japan airline ANA forecasts record $4.8 bln loss for virus-blighted year

Credit: REUTERS/ISSEI KATO

ANA Holdings Inc, Japan's biggest airline, on Tuesday forecast a record operating loss of 505 billion yen ($4.82 billion) for the year to March, after coronavirus-related travel restrictions forced it to cancel flights and ground aircraft.

Adds aircraft retirements, ANA and peers' pandemic response

TOKYO, Oct 27 (Reuters) - ANA Holdings Inc 9202.T, Japan's biggest airline, on Tuesday forecast a record operating loss of 505 billion yen ($4.82 billion) for the year to March, after coronavirus-related travel restrictions forced it to cancel flights and ground aircraft.

The figure compared with an average loss forecast of 365 billion yen based on 10 analyst estimates compiled by Refinitiv.

ANA reported an operating loss of 280.95 billion for the six months ended Sept. 30 compared with a 78.8 billion yen profit in the same period a year earlier.

ANA, like other airlines, is burning through cash to keep jets flying albeit with too few passengers. Though demand for domestic flights has recovered to about half of last year's level, helped by government-subsidised travel, it is flying only a fraction of its usual international schedule.

After initially halting nearly all entry to prevent the spread of the novel coronavirus, Japan recently began allowing in business travellers and foreign residents on condition they agree to quarantine for two weeks. Most overseas tourists are still banned.

On Tuesday, ANA said it would retire 35 planes, 28 of them early, including 22 Boeing Co BA.N 777 widebodies and delay delivery of one 777 and one Airbus SE AIR.PA A380 superjumbo.

To ensure it has enough cash to survive the downturn, the airline has secured $3.8 billion in subordinated loans from state-backed and private lenders.

It is also plans to seek voluntary redundancies and wants to transfer some employees to other companies until air travel recovers, sources previously told Reuters.

ANA expects the downturn in domestic travel, which normally accounts for just over half its revenue, to last for about two years, with international routes unlikely to recover until 2024.

Its response to the pandemic follows job cuts and early aircraft retirements at other large Asian carriers including Singapore Airlines Ltd SIAL.SI, Cathay Pacific Airways Ltd 0293.HK and Qantas Airways Ltd QAN.AX - all suffering from border restrictions that have curbed international travel.

($1 = 104.7000 yen)

(Reporting by Tim Kelly; Editing by Christopher Cushing)

((tim.kelly@thomsonreuters.com; +813-4563-2738;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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