• Kyodo


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.