TOKO: Japan Airlines (JAL) on Friday forecast a record operating loss for the year through March, and said it would retire planes early as the pandemic hits travel demand.
Japan’s second-biggest airline has, like other carriers, been hammered by a collapse in air travel demand. It said on Friday it planned to retire 24 of its Boeing 777 widebodies by March 2023, though its response is less aggressive than larger rival ANA Holdings Inc.
Unlike ANA, JAL also said it will not ask staff to take pay cuts and is dispatching workers to hotels, stores and other outside companies. On any one day about 500 employees are working elsewhere, some for only a day while others will be gone for as long as two years, the company said.
JAL forecast a full-year loss between 330 billion yen ($3.2 billion) and 380 billion, compared with an average loss forecast of 273.1 billion from 10 analysts compiled by Refinitiv. The airline posted a second-quarter operating loss of 92.9 billion yen versus an 82.9 billion profit a year earlier.
HIGHLIGHTS
● Reports operating loss of 92.9 blllion yen.
● Will retire 24 Boeing 777 widebodies early.
● Cash burn to fall, expects to expand credit line.
It expects cash burn of between 15 billion yen and 20 billion a month for the rest of the financial year, compared with 45 billion yen to 50 billion yen so far. It also plans to expand a credit line by 100 billion yen next month.
ANA, which plans to send more than 400 workers to other companies and cut the pay of others, this week forecast a record full-year operating loss of 505 billion yen. It plans to retire 35 planes, including 777s jets, this year.
Domestic bookings at JAL in October have been about half of what they were a year ago, while overseas flights are still mostly empty. By the end of March, international demand is likely to be below 50 percent of normal.
