ANA sees biggest-ever loss as pandemic guts global travel

ANA Holdings forecast its biggest-ever operating loss of 505b yen ($4.8b) for the fiscal year through March 2021, the latest airline to face an existential threat to its business due to the pandemic. The Japanese carrier unveiled a restructuring plan that calls for: i) a newly branded low-cost carrier in addition to Peach, the budget airline already operated by ANA; ii) Y150b in cost reductions this year and Y250b the following fiscal period, by cutting procurement, office rents and other activities; iii) the temporary transfer of hundreds of employees to other companies; 100 by the end of this year, and 400 by spring; iv) Retiring or halting orders on a total of 33 aircraft, to bring the group’s fleet down to 276 planes; v) Y400b in subordinated loans to bolster finances. The outlook issued by ANA calls for a wider full-year loss than the Y376b analysts were projecting on average, according to estimates compiled by Bloomberg. ANA also forecast Y740b in revenue for the fiscal year through March, compared with analysts’ average prediction for Y926b. The $838b global airline industry is set to see revenue slashed by half this year, with carriers cutting jobs and securing funding to ride out the crisis. Bloomberg Intelligence analyst James Teo said the cost management plan, especially the downsizing of the group’s fleet of aircraft, was a positive step. “This is the main driver that will help ANA save Y250bin fiscal 2021 alone based on their guidance,” Teo said. “I am less optimistic about their third brand and proposed platform business, as these could require investment and thus now may not be the best time to do these, although they could be good plans to have for the longer term.”<br/>