Japan’s All Nippon Airways (ANA) is pegged to see a net loss of nearly $5 billion for the financial year to March 2021, after the COVID-19 pandemic decimated demand for international travel.
Sources close to the matter have suggested Japan’s largest airline will see a net loss of US$4.8 billion in the full-year to March 2021, which would be the biggest annual loss reported in the history of the carrier.
ANA has so far relied upon the provision of billions of dollars in loans, in addition to a government tourism campaign, in order to weather the treacherous waters of the unprecedented COVID-induced slump in travel demand.
The carrier may also take advantage of accounting rules in order to avoid aircraft writedowns, according to sources close to the matter.
The airline may also shed up to 30 aircraft from its fleet, which currently stands at 238 planes.
It is not yet clear which aircraft the carrier will choose to offload, however it has been suggested that the airline will focus on offloading its larger passenger jets, including its two Airbus A380s, or a number of its 59 wide-body Boeing 777s.
It comes after a recent period of expansion for ANA, which extended its fleet in anticipation for the 2020 Tokyo Olympics, now postponed until 2021.
ANA plans to announce its official earning results for the first half of the current fiscal year on Tuesday, and will provide its outlook for full-year earnings, as well as its intended restructuring plan including the reductions of its larger airliners.
The company hopes to, for the most part, sell its redundant jets to aircraft leasing companies. It will also consider dismantling the jets and selling them off for parts, as well moving them to long-term storage facilities, according to the sources.
The company will also announce its intentions to acquire 400 billion yen in subordinated loans from Japanese banks, allowing the company to count part of the debt as capital, as well as reduce staff pay by up to 30 per cent, to continue to navigate the crisis.
ANA logged a net loss of US$1.04 billion in the April-June quarter.
Meanwhile, local rival Japan Airlines reported a net loss of US$895 million in the April-June period and has yet to release an earnings forecast for the current business year to March.
