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ANA Posts A Loss As Travel Restrictions In Asia Continue – Simple Flying


When it comes to Asian carriers such as Japan’s All Nippon Airways (ANA), a loss reported for the latest fiscal quarter doesn’t come as much of a surprise. This is primarily due to ongoing border restrictions. However, ANA is changing and adapting to these challenging times. Let’s take a look at the airline’s report for the first half of its fiscal year, which was released on October 29th.

All Nippon Airways Boeing 777-381(ER) JA792A
ANA is shifting its short-term focus to operating more all-cargo flights. Photo: Vincenzo Pace | Simple Flying

$866.6 million loss

With international border restrictions remaining in place across much of the region, lower passenger numbers are no surprise. With much of the world still subject to Japan’s entry ban, international passenger traffic primarily consists of repatriations and circumstances deemed “special” and  “exceptional” by the government.

Despite Tokyo hosting the Summer 2020 Olympic games in July/August 2021, it wasn’t enough to put ANA in positive numbers.

Thus, in the first six months of the airline’s fiscal year 2021 (April 1st, 2021 – September 30th, 2021), there was a reported net loss of 98.8 billion Yen, equating to roughly $866.6 million. Obviously, this loss can be attributed to a lower operating revenue when compared with operating expenses.

 

ANA Financials Q3
¥1 (JPY or Japanese Yen) is equivalent to $0.0088; $1 is equivalent to approximately ¥114. Photo: ANA

Moving in the right direction

Despite the massive loss over the past six months, ANA is moving in a positive direction when compared to the same period during the previous fiscal year.

Indeed, the airline losses over this period was 48% lower than in 2020- something helped greatly by a ¥139 billion jump in operating revenue, equivalent to a 48% increase.

ANA also experienced a steady rise in international passenger traffic over the northern Summer of 2021, when compared to earlier months of the year. This is attributed to Tokyo-2020 and homecoming demand.

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However, the airline saw these numbers drop in September as activity slowed down- something that is expected to continue over the next few months. At the same time, the airline had forecasted a rise in its domestic passenger activity for October and November 2021.

 

The Japanese airline’s performance between 2020 and 2021. Photo: ANA

ANA Financials Q3
The Japanese airline’s performance between 2020 and 2021. Photo: ANA

ANA’s adaptations

Adapting to its new circumstances, ANA outlined how it will be changing to better perform during the global health crisis.

When it comes to the airline’s fleet, the following strategies are on the list:

In terms of its workforce, ANA says that it will curb new hiring while looking to reduce wages and bonus levels.

ANA-A380-FLYING-HONU
The airline has three Airbus A380s in its fleet. Photo: Airbus

Finally, when it comes to customer experience, ANA will move to introduce systems where customers can complete the check-in process out of airport “in a self-service manner.” This includes encouraging customers to pre-order services, including meals. To support this shift, ANA will strengthen its smartphone app for increased functionality.

What do you think of ANA’s financial performance? And what do you think of its strategy to adapt? Let us know in the comments section.



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