Japan Airlines Co (JAL) expects a worse loss this fiscal year than previously forecast as the COVID-19 pandemic wreaks havoc on international demand for travel.
The nation’s flag carrier is now forecasting a net loss of ￥300 billion (US$2.9 billion) for the 12 months ending on March 31 and sales of ￥460 billion, according to an exchange filing yesterday.
For the third quarter, JAL reported a net loss of ￥51.5 billion, wider than the ￥36.9 billion estimated by analysts. Sales for the period were ￥161.8 billion versus the ￥170 billion forecast.
Photo: AFP
Airlines in Japan are facing a grim outlook as COVID-19 cases rise and the nation extends its state of emergency. Surging virus numbers in Asia’s second-biggest economy could have limited JAL’s traffic in the third quarter of last year to just 27 percent of pre-pandemic levels, Bloomberg Intelligence analysts said last month.
Japan is also still yet to reach a conclusion on whether to go ahead with the Olympics later this year.
While Thomas Bach, president of the International Olympic Committee, and the Japanese government are pledging to forge ahead, a Japan Broadcasting Corp poll showed that almost 80 percent of people think the Games should be canceled or postponed.
The nation’s other big airline, ANA Holdings Inc, on Friday reported a quarterly operating loss that was slightly narrower than analysts’ estimates. ANA’s pledge to get back into the black next fiscal year looks challenging considering the pandemic shows no sign of abating.
Separately, Ryanair Holdings PLC said it is betting on a rapid rollout of coronavirus vaccines to deliver a late-summer travel surge after forecasting losses of up to 950 million euros (US$1.1 billion) in the year through next month.
While a resurgence of COVID-19 cases in Europe means Easter is “essentially a writeoff,” the passenger tally might recover to 50 to 70 percent of normal levels in the peak months of July, August and September as more people get the jab, chief executive officer Michael O’Leary said in an interview yesterday.
“You’re going to see a dramatically accelerated rate of vaccination across the European Union,” O’Leary said. “That’s the point where we are released from these restrictions. Short-haul travel will recover strongly and quickly. There is huge suppressed travel demand in Europe.”
Europe’s biggest discount airline expects to carry as few as 26 million people in the current 12 months compared with 149 million in fiscal 2020 as the emergence of new coronavirus variants drives further spikes in case numbers.
Governments have responded with tougher rules and told citizens that it is premature to book summer holidays.
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