• Kyodo

  • SHARE

Japan Airlines Co. on Tuesday forecast a net loss of ¥146 billion ($1.3 billion) for the business year through March amid a later-than-expected recovery in air travel demand from the COVID-19 fallout.

The evaporation of demand for air travel amid the coronavirus pandemic had already led JAL to post a net loss of ¥286.69 billion for the year ended March 2021, the first red ink since its 2012 relisting following a state-backed rehabilitation.

Despite the sluggish recovery in demand, the cargo business remained a bright spot, and JAL expects the favorable business conditions to continue. Fiscal 2021 sales were forecast to rise 59.2% to ¥766 billion.

In the six months to September, the Japanese airline logged a net loss of ¥104.98 billion, smaller than its 161.23 billion loss a year earlier. Sales grew 49.2% to ¥290.65 billion, JAL said.

Based on current forecasts, Japan’s two major airlines — JAL and ANA Holdings Inc. — will remain mired in the red for a second straight year, underscoring the gravity of the COVID-19 hit to the airline sector.

“There are signs of a gradual recovery in demand, but it will take a while until we see a full recovery,” JAL said.

A COVID-19 state of emergency was in place in many prefectures for most of the April-September period, limiting the recovery in demand for domestic flights.

Demand for international flights remains depressed due to cross-border travel restrictions. The Tokyo Olympics and Paralympics in the summer apparently had a limited impact because foreign spectators were barred.

In the first half of fiscal 2021, JAL handled around 6.2 million passengers on domestic flights, up from 4.6 million a year earlier.

The number of international flights stood at 353,640, roughly a 3.2-fold year-on-year increase.

Last week, ANA Holdings, the parent of All Nippon Airways Co., revised downward its fiscal 2021 earnings outlook to a net loss of ¥100 billion from its earlier projected ¥3.5 billion profit.

Within five years, it will reduce the workforce in its mainstay airline segment by around 9,000, or about 20% from fiscal 2020, to emerge from what President and CEO Shinya Katanozaka described as the “pandemic tunnel.”

In a positive development for the transport and tourism sectors, Prime Minister Fumio Kishida, fresh out of a decisive win in Sunday’s lower house election, is planning to relaunch a subsidy program to spur local tourism in Japan following recent drops in coronavirus cases across the country.

In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.

SUBSCRIBE NOW

PHOTO GALLERY (CLICK TO ENLARGE)