Despite attempts to bring expenses down amid the coronavirus outbreak, All Nippon Airways’ parent company ANA Holdings swung to a massive loss in the first quarter.
For the three months ended 30 June, ANA Holdings reported an operating loss of Y159 billion ($1.51 billion). This was in contrast to the Y16.1 billion profit it posted for the same quarter last year.
Revenue for the period collapsed, as travel demand for both international and domestic flights “declined significantly” amid travel restrictions imposed globally and within Japan, says ANA Holdings.
Consequently, the group saw revenue tumble 76% year on year, to Y122 billion.
Meanwhile, expenses for the quarter saw a 42% year-on-year drop, to Y280 billion.
ANA Holdings adds that it “raised [its] efforts to minimise both variable and fixed expenses” for the period, but it was not enough to offset the “unprecedented impact” of the pandemic.
The group reported a net loss of Y109 billion, reversing the Y11.4 billion net profit it posted during the same quarter in 2019.
ANA saw the largest fall in revenue in its international passenger service. For the quarter, revenue for its international network tumbled 94% to Y9.5 billion. The Star Alliance carrier flew just 91,000 passengers for the period, a 96% decline compared to the same period in 2019.
ASKs shrank 86.2%, while RPKs dropped 95.2%. Passenger load factor for the period was 26.2%, a 49.2 percentage point drop year on year.
Comparatively, revenue for ANA’s domestic network came in at Y22.4 billion, an 86.5% year-on-year decline. It carried 1.28 million passengers, an 88% decline year on year, due mainly to the state of emergency declared by the Japanese government in April that restricted domestic travel.
ASKs fell 73.3%, while RPKs declined 88.1%, leading to a passenger load factor of 29.9%, 37.2 percentage points lower than the same period last year.
The group’s low-cost carrier segment, comprising Peach Aviation, did not fare any better — revenue for the quarter collapsed nearly 92% year on year to Y1.7 billion.
In its outlook, ANA says it will double down on transformation efforts, to bring down costs.
“In the mid-term, ANA will pursue sustainable growth by creating a business structure, where we will be equipped to further strengthen the portfolio of our aviation business and establish a new business unit capable of serving as a source of profit while steadily delivering value to the group,” it adds.