ANA gives surprise profit outlook even as planes remain grounded

ANA Holdings Inc. issued a surprise profit outlook for the fiscal year, even as international air travel to and from Japan remains limited and countries across the globe recover from the pandemic at different speeds. Operating profit for the year through March 2022 will be 28b yen ($257m), Japan’s No. 1 carrier said Friday, seeking to deliver on last year’s pledge to return to profit despite the spread of Covid-19. That compares with analysts’ average projection for a 93.6b yen loss, according to data compiled by Bloomberg. The aviation industry has been pummeled as countries closed their borders and international travel dried up, and the recovery will likely be slow. Airlines are expected to lose a combined $48b in 2021, the IATA has said. Still, ANA CEO Shinya Katanozaka said the company will turn cash-flow positive around July, with current spending sustainable for another three years. ANA’s operating loss for the year through March was 465 billion yen, in line with a narrower forecast issued last week. Revenue fell 63% to 729b yen. “It’ll be hard for ANA to achieve the forecast without cutting a lot of costs,” said Yasuo Hashimoto, principal consultant at Japan Aviation Management Research. “The second quarter, including summer holidays, will be an important source of income as it’s a high season.” The airline has been lowering costs by retiring large aircraft including Boeing 777s, and dispatching employees to other companies instead of shedding jobs. It has also reduced office space as more staff work from home.<br/>