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ANA Holdings Inc, Japan’s largest airline, said on Friday that due to a weaker- than-expected first half due to travel restrictions, the company now expects to declare an operating deficit for the current fiscal year, down from an earlier forecast of a profit.
The airline trimmed costs and profited from robust cargo demand to register a narrower operational loss of 116 billion yen ($1.02 billion) for the six months ended Sept. 30, compared to a 280.95-billion-yen loss a year earlier.
ANA, which has lost money for seven quarters in a row, said it expects to generate a profit in the fourth quarter as travel demand is projected to improve.
However, it expects to report an operating loss of 125 billion yen for the fiscal year ending March 2022, down from its previous projection of 28 billion yen. Analysts had predicted a full-year operating profit of 89.7 billion yen based on an average of eight projections before the upgrade.
“The revised forecast reflects the findings that projected second-half revenue will not be sufficient to cover lack of revenue during the first half of the fiscal year,” the airline said in a statement.
At the end of last month, Japan removed a state of emergency that had been in place across much of the country. While domestic tourism is progressively improving, there is no indication that international travel, particularly inbound tourism, will be resurgent anytime soon.
Most non-resident foreigners, including tourists and business travellers, are still barred from entering the nation due to rigorous controls. Companies in the tourism and travel industries, in particular, have suffered since the Tokyo 2020 Olympics were hosted this summer after a year’s postponement with no spectators or overseas tourists.
The event was initially viewed as a tourism boon for Japan, which had been stepping up efforts in recent years to attract more overseas tourists in order to jumpstart a stagnant domestic economy.
Story by : Norvisi Mawunyegah