All Nippon Airways (ANA) admits it is heading for a higher-than-expected loss in its 1998-9 fiscal year, which ended on 31 March.

The Japanese carrier says press reports that it will suffer a loss of around ´11 billion ($92 million) on sales of ´900 billion are "probably" close to reality, and that the loss will certainly exceed the ´5 billion projected in October last year.

ANA has been forced to slash fares by up to 50% in the face of intense competition from domestic rivals Air Do and Skymark and from Japan Airlines on high-density routes.

"We have had an increase in the number of passengers, but new entrants into the market have put pressure on pricing, particularly on two of our highest volume routes," the airline says, while pointing out that it has at least met an operating cost target of ´10.9 per available seat kilometre - 20% down on three years ago.

Source: Flight International