Japan's biggest airline, ANA Holdings, has swung to a slightly narrower than expected quarterly operating loss but has kept its forecast for a record full-year loss as fresh COVID-19-related travel restrictions hit the industry.
ANA reported an operating loss of 81.4 billion yen ($779.10 million) for the quarter to December 31, from a 40.7 billion yen profit a year ago, which is slightly better than an average 83.8 billion yen loss that was estimated by three analysts in a Refinitiv poll.
It maintained its full-year forecast for a record operating loss of 505 billion yen. That compares with an average 472 billion yen loss forecast by 10 analysts in a Refinitiv survey.
ANA chief financial officer Ichiro Fukuzawa said that this is due to bigger-than-planned cost cuts and a strong demand of international freight services. He added that the airline is currently not thinking of selling assets other than aircraft.
Comparing the third quarter "to results from earlier in the year provides a clear indication that our recovery is already underway", Fukuzawa said in a statement.
However, ANA said that domestic traffic began to decline in December when a fresh wave of COVID-19 cases in Japan undermined an earlier recovery and led the government to end a subsidised tourism campaign.
ANA has nonetheless said that domestic routes will be the main source of income in the next business year.
The airline is still flying its international routes but with only a fraction of the passengers that it had before the COVID-19 pandemic, while its international cargo revenues rose by 30% in the first nine months of the financial year due to strong demand.
International Travel Demand Recovery Projection
ANA projected that international travel demand will recover to 50% of pre-pandemic levels this fiscal year, but Fukuzawa said that it needs to be prepared for the possibility that that could be missed by a big margin.
Japan has closed its borders to nearly all foreign non-residents in a bid to contain the pandemic.