TOKYO (Reuters) - Japanese airline operator ANA Holdings is expected to suffer a net loss of around 500 billion yen ($4.8 billion) for the fiscal year to March after the COVID-19 pandemic battered travel demand, a source with direct knowledge said on Wednesday.
Forecast to book its biggest loss, Japan’s largest airline has turned to billions of dollars in loans and a government tourism campaign to weather the slump in air travel, and could take advantage of accounting rules to avoid aircraft writedowns.
As part of its cost-saving efforts, the airline plans to cut its fleet of aircraft by about 25, said the source, who declined to be named due to the sensitivity of the matter.
A company spokeswoman told Reuters that nothing had been determined.
Global airlines have taken a hit from the plunge in travel caused by the coronavirus, scrambling to cut costs as losses mount.
Hong Kong’s Cathay Pacific Airways Ltd said on Wednesday it would slash 5,900 jobs and end its regional Cathay Dragon brand.
ANA is also slashing personnel costs through redundancies and paycuts, and along with rival Japan Airlines Co Ltd (JAL) is getting government help including a waiver on airport landing fees.
Tokyo sees the carriers as crucial to keeping Japan, a 3,000-kilometre archipelago stretching along the edge of East Asia, connected.
The airline also plans to reduce its international routes, hoping to survive through the pandemic with a large domestic market.
It plans to suspend a large volume of international flights at three airports in Japan, with about an 80% cutback at Narita airport, according to an email from the company president to employees seen by Reuters.
The company is scheduled to release its earnings results on October 27.
The Kyodo news agency earlier reported that ANA plans to cut its fleet of wide-body aircraft by half as part of restructuring plans expected to be disclosed later this month.
($1 = 104.8500 yen)
Reporting by Maki Shiraki, Chris Gallagher, writing by Ju-min Park; Editing by Jacqueline Wong, Louise Heavens and Jan Harvey
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