As the novel coronavirus pandemic sharply reduced demand for air travel and also every country has stopped international flight and there is limited take off in domestic flight, On Wednesday ANA Holdings Inc reported a record net loss of 108.82 billion yen ($1 billion) in the April-June quarter.
The parent company of All Nippon Airways Co said it posted a group operating loss of 159.07 billion yen in the three months through June, plunging from a profit of 16.17 billion yen a year earlier. Consolidated sales collapsed 75.7 percent to 121.61 billion yen.
Mentioning uncertainty in its business environment due to the pandemic. The company did not provide an earnings forecast for the business year ending March.
ANA said the number of passengers for international flights excluding those of its low-cost carrier plummeted 96.3 percent to 91,582 in the reporting quarter, while domestic flights saw a decline of 88.2 percent to 1.28 million.
In an online press conference ANA Holdings Chief Financial Officer Ichiro Fukuzawa said, “The number of domestic passengers has gradually recovered in July, but demand for international flights remains very weak”.
He added, however, “Seat reservations for domestic flights after the second half of August and later remain stagnant” given the recent resurgence of virus infections across the country, although the government launched a subsidy campaign earlier this month to spur domestic travel.
Fukuzawa said, “We had initially expected the virus outbreak to fade out around next month, but we are now cautious about further developments and will closely monitor the situation”.
Fukuzawa said, “Demand for air freight cannot completely make up for the falling number of passengers, but we would like to take advantage of our cargo business”.
He underlined that the company has been financially stable as it held 542 billion yen in cash as of the end of June. “We will maintain our workforce and overcome this crisis” caused by the pandemic, he also added in his statement added.
However, The company, however, plans to cut 255 billion yen in costs in fiscal 2020 by reducing its fleet of aircraft and introducing a partially paid leave program for 43,500 employees at its 36 group companies, according to Fukuzawa.