TOKYO: Japan Airlines’ annual net profit plunged nearly 65 per cent, the company said Thursday (Apr 30), as it faced the “unprecedented” impact of the coronavirus pandemic on aviation demand.
JAL said net profit for the fiscal year ending in March fell 64.6 per cent to ¥53.4 billion (US$500 million) on annual sales of ¥1.4 trillion, down 5.1 per cent.
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The results were largely in line with a profit warning the airline issued last week.
JAL said demand had plunged owing to entry bans around the world, the cancellation of major domestic events, and a state of emergency in Japan with authorities urging citizens not to travel.
“Our group is facing an unprecedented situation,” the company said in a statement.
The airline did not release earnings forecasts for the current financial year, citing uncertainty over the pandemic.
For now, JAL plans to cut its number of flights by 90 per cent on international routes and more than 60 per cent on domestic routes from its flight schedule announced before the pandemic.
But the firm said it remained optimistic about the outlook.
“The decline in flight demand due to the impact of the new coronavirus is a temporary phenomenon and our mid- and long-term forecast that demand for flights from and to Japan will grow greatly has remained unchanged,” it said.
On Tuesday, domestic rival ANA Holdings said its annual net profit dived 75 per cent to ¥27.6 billion on sales of ¥1.9 trillion, which were down 4.1 per cent.
ANA had been expecting strong sales but also higher costs as it prepared to expand services in the greater Tokyo region ahead of the 2020 Olympics.
But the pandemic has forced the Games to be delayed by a year and battered Japan’s tourism sector, while many countries have cancelled or limited international and domestic travel.