Japan Airlines (JAL) said on Friday it expected to post a full-year loss in the vicinity of 240 billion - 270 billion yen (US$2.3 million - US$2.6 billion) for the 12 months to March 31, 2021, compared with a reported net profit of 53.4 million yen for its most recent fiscal year, as it battled the impact of COVID-19.Read More »
Revenue for the 12 months is forecast to decline by up to 62%, JAL said in a regulatory filing to the Tokyo Stock Exchange. "Many countries and areas still show no sign of slowing down the spread, which makes the recovery of international passenger demand unforeseeable," JAL said. On the domestic front, JAL said passenger demand had recovered since late June but fell back in August from a rise in new COVID-19 infections. "Japan is still struggling to find how to resume economic activities with infection prevention measures, thus it is expected to take more time for domestic passenger demand to make a full recovery," JAL said.
JAL reported a net loss of 161.2 billion yen (US$1.5 billion) for the six months to September 30, 2020, falling into the red from a net profit of 54.1 billion yen in the same months last year. Revenue dropped 26%, to 194.7 billion yen. The oneworld alliance member carried 112,083 international passengers in the half, a 97.7% decline from five million in the same months of 2019. The number of domestic passengers fell 76.1%, to 4.6 million, from 19.4 million previously. "Despite the uncertainty of the environment, we will try to cut losses by reducing fixed costs as much as possible and by increasing revenue where possible as we cope with the demand supply situation flexibly," JAL said.
The airline group will retire 11 777-200ERs from its international fleet in the current fiscal year and 13 777-200/300s, servicing domestic routes, will depart the carrier by March 31, 2023. The company also will return five 737-800s to lessors by September 2022. JAL said the flexible adjustment of the fleet and the retirement of older aircraft would help address the "temporary demand downturn due to COVID-19".
Mitsubishi Heavy Industries (MHI) said late last week it would halt work on its Mitsubishi SpaceJet program. "Given current development status and market conditions, we have no choice but to temporarily pause the majority of SpaceJet activities," MHI CEO, Seiji Izumisawa, said in the company's 2021 medium-term business plan (MTBP). "We will work to review where we stand, make improvements and assess a possible program restart." Izumisawa said there would be a shift in investment away from SpaceJet "into priority growth areas" such as energy transition, new mobility and logistics. The MTBP showed MHI had allocated 20 billion yen (US$190 million) to the SpaceJet program from 2021 to 2023. In the previous MTBP (2018-2020) the figure was 370 billion yen.
China Southern Airlines (CSA) has reported net profit of 711 million yuan (US$106.2 million) for the three months to September 30, 2020, down 70% from 2.4 billion yuan in the prior corresponding period. Revenue fell 40%, to 26.4 billion yuan, CSA said in a regulatory filing late last week. Despite the quarterly profit, CSA was in the red for the nine months to September 30 with a net loss of 7.6 billion yuan, compared with net profit of 4.1 billion yuan for the same months in 2019. "In view of the huge losses from the pandemic to the aviation industry and the global economy, it is expected the operating results of the group in 2020 will be materially and adversely affected," CSA said.
Air China said late last week there were encouraging signs in the domestic market as it reported a net loss of 671 million yuan (US$100 million) for the three months to September 30, 2020, from net profit of 3.6 billion yuan a year ago. Revenue fell 50%, to 18.7 billion yuan, Air China said in a regulatory filing. "In the third quarter, the domestic air passenger market resumption is accelerating, but air passenger transportation for international routes remained low," Air China said. For the nine months to September 30, the carrier posted a net loss of 10.1 billion yuan, compared with a net profit of 6.8 billion yuan previously.
China Eastern Airlines (CEA) said late last week it fell to a net loss of 563 million yuan (US$84.1 million) for the three months to September 30, compared with net profit of 2.4 billion yuan for the quarter in 2019. Revenue was 50% lower, at 17.2 billion yuan, CSA said in a regulatory filing. The Shanghai-headquartered airline also was loss-making for the nine months to September 30, reporting a net loss of 9.1 billion yuan for the period, down from a net profit of 4.4 billion yuan previously. "Based on the preliminary judgment of the situation of COVID-19, it is expected the operation results of the company for 2020 will be materially and adversely affected," CEA said.
Indian carrier, IndiGo, last week reported a net loss of 12 billion rupees (US$161 million) for the three months to September 30, a deterioration from a net loss of 10.6 billion rupees in the prior corresponding period. Revenue tumbled 64.5%, to 30.3 billion rupees, the company said in a statement. IndiGo CEO, Ronojoy Dutta, said low levels of aircraft utilisation were a major concern. He said the airline only was able to deploy 37% of last year's capacity, measured by available seat kilometres (ASK), during the quarter due to government restrictions. "However, we have been gradually increasing our capacity. We hope to be utilising around 60% of our third quarter fiscal year 2020 capacity in ASKs in third quarter fiscal year 2021," Dutta said at a company results presentation.
The government of India said late last week it had extended the deadline for expressions of interest (EOI) to buy 100% of Air India, 100% of Air India Express and 50% of Air India SATS Airport Services Private Ltd by a month and a half to December 14, 2020. The sale conditions have been revised, with potential buyers now able to submit bids on the basis of the assets' enterprise value, India's Ministry of Finance said in a statement late last week. The previous deadline was October 30.
Greater Bay Airlines (GBA) founder, Bill Wong, told the South China Morning Post newspaper in an exclusive interview published today he hoped to receive approval from Hong Kong authorities for his new airline to begin service in 2021. Wong said GBA's business model would sit between full-service carriers and low-cost airlines and added the airline had leased three 737s for its launch. He is ready to hire pilots, particularly those who had lost their jobs when the Cathay Pacific Group shut down its regional wing, Cathay Dragon. Wong told the newspaper he had spent HK$500 million (US$64.5 million) to set up GBA, with the figure expected to reach HK$2 billion.
