ANA Cuts Profit Guidance As COVID-19 Curtails Revenue
All Nippon Airways (ANA) Holdings has significantly cut its estimated profit for its fiscal year that ended March 31, attributable to a decrease in revenue linked to the COVID-19 pandemic.
The airline said its fiscal 2019 net profit will be ¥27 billion ($251 million), down 71.3% from its earlier projections of a ¥94 billion profit for the period. This represents a larger drop from the airline’s ¥110.7 billion profit in fiscal 2018. ANA has yet to report its full financial results for fiscal 2019 but issued an update with the change in profit guidance.
The profit fall was caused by the COVID-19 pandemic’s effect on the January-March quarter, which was ANA’s fiscal fourth quarter. Travel demand “declined sharply in March,” the carrier said. Revenue for the full fiscal year was down by ¥120 billion yen, or 5.7%, compared to the previous forecast, to a total of just under ¥2 trillion.
This is the second time ANA has revised its forecast for fiscal 2019. In October, the airline dropped its net profit forecast to ¥94 billion, down by ¥14 billion from its previous guidance of a ¥108 billion profit.
In this case, ANA said the downgrade was due to its operating revenue not increasing as much as expected in the fiscal first half. Cargo demand was weaker because of the U.S.-China trade dispute and there was a slowdown in international business passenger demand. ANA forecast these conditions to continue in the second half, along with greater competition in the LCC sector.