Business / Corporate

ANA cuts earnings outlook due to weak cargo demand amid U.S.-China trade war

Kyodo

ANA Holdings Inc. lowered its earnings outlook Tuesday for the business year through March, due to weak demand for air cargo and business-class seats amid continued trade tension between the United States and China.

The parent company of All Nippon Airways Co. cut its consolidated net profit outlook for the current business year to ¥94 billion ($860 million) from the ¥108 billion initially projected in April.

Japan’s largest airline group in terms of passenger numbers said group operating profit is also expected to fall to ¥140 billion from its previous forecast of ¥165 billion, on sales of ¥2.09 trillion against the ¥2.15 trillion earlier projected.

In the first half of the business year, ANA posted group net profit of ¥56.79 billion, down 23.0 percent from a year earlier, and a 25.0 percent decline in consolidated operating profit to ¥78.88 billion, while sales increased 1.7 percent to a record ¥1.06 trillion.

The company attributed the fall in operating profit to increased costs as the firm prepares for an expansion of flight slots next year at airports in the Tokyo metropolitan area.

In the April-September first half, revenue from its international air cargo business sank 20.4 percent from a year earlier amid uncertainties over the outlook for the global economy. But revenue from international passengers — excluding its two low-cost carriers — edged up 2.3 percent.

Passenger revenue from its Peach Aviation Ltd. and Vanilla Air Inc. budget carriers slid 4.6 percent due to intensified competition and a cut in the number of flights made in order to prepare aircraft and crew for their merger by the end of March, the company added.

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