All Nippon Airways has posted a net loss of 4.2 billion yen ($43 million) for the fiscal year ending 31 March due to a sharp drop in demand for air travel.

The Star Alliance member says in a statement that this amounted to a 68.4 billion yen drop from the 64.1 billion yen in net profit that it made a year before, and was its first full-year net loss in six years. Revenues fell by 6.4% to 1.39 trillion yen and operating profit was down 91% at 7.5 billion yen.

"2008 was a disastrous year for business in general, with airlines around the world hit by the lack of consumer confidence and commercial activity, and ANA was no exception," says the airline's executive vice-president for finance Tomohiro Hidema. "We achieved more than 18 billion yen in cost savings, but this was outstripped by a fall in revenue of over 95 billion yen."

RPKs fell by 7% as the total number of passengers carried fell by 6.4% to 47.1 million. ASKs were 4.2% lower, with the international load factor down 0.2 percentage points at 63.5% and domestic load factor down 5.9 percentage points at 69.4%.

"This was caused primarily by a drop in passenger revenues on both international and domestic routes of around 6%, and especially by the fall in demand for overseas business travel, which was depressed by more than 25% on Europe and North America routes for the final three months of the year under review. This came in spite of our efforts to spur demand on all fronts," says Hidema.

Looking ahead, ANA says that the expansion of airport capacity in Tokyo will benefit the carrier. However, it adds that the ongoing global economic crisis means that that the future remains uncertain.

"While we expect the recession to continue, leaving us in an operating environment the like of which we have never seen before, we will push on with initiatives to increase demand and reduce costs so that we can ride out the worst and engineer a return to the black," says Hidema.

Source: Air Transport Intelligence news