ANA expects record net loss of 510 bil. yen in FY 2020 amid pandemic

28-Oct-2020 Intellasia | Kyodo News | 6:02 AM Print This Post

ANA Holdings Inc. said Tuesday it is expecting a record net loss of 510 billion yen ($4.9 billion) in the current business year through March, taking a severe hit from depressed air travel demand amid the coronavirus pandemic.

In the six months through September, ANA, the parent company of All Nippon Airways Co., logged a net loss of 188.48 billion yen as total revenue sank 72.4 percent from a year earlier to 291.83 billion yen. It reported an operating loss of 280.95 billion yen.

The company said it will take out 400 billion yen in subordinated loans from major Japanese banks to bolster its financial base as it announced a series of restructuring steps, including reducing its fleet.

ANA President and CEO Shinya Katanozaka pledged a return to profitability in the next business year, saying at a press conference, “We will emerge as a strong ANA group.”

In the April-September period, revenue from international flights plunged 94.2 percent from a year earlier to 19.6 billion yen as many countries maintained travel restrictions due to the pandemic. Sales from domestic flights sank 78.6 percent to 78.9 billion yen.

ANA is not alone in burning through cash as major airlines, including rival Japan Airlines Co., have also been hit hard by a sharp drop in international passengers.

Prospects appear slim for a swift recovery in international air travel, a critical revenue source for ANA, as key markets such as Europe and the United States are still struggling to contain the spread of COVID-19, the respiratory disease caused by the novel coronavirus.

The outlook for domestic routes may be less pessimistic as the Japanese government is seeking to allow more economic activity while preventing a surge in coronavirus cases. A government subsidy programme to revive domestic tourism was launched in July, offering a ray of hope for ANA.

The estimated full-year net loss is far larger than the 57.39 billion yen of red ink it reported in fiscal 2010, following the global financial crisis wrought by the collapse of US investment bank Lehman Brothers in 2008.

The company projects that sales in the current fiscal year will plummet 62.5 percent from a year earlier to 740 billion yen.

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Category: Japan

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