Japan’s ANA surprises with small Q3 operating profit

ANA Airbus A380

ANA Holdings Inc surprised with a small third-quarter operating profit on Feb. 1 but Japan’s biggest airline still expects a loss for the year, indicating a worse-than-expected fourth quarter as the Omicron variant spreads.

ANA’s 100 million yen ($869,716) operating profit for the quarter ended Dec. 31 was its first in eight quarters and contrasted with the 16.5 billion yen loss forecast by five analysts polled by Refinitiv.

It also beat ANA’s target of returning to an operating profit in the fourth quarter.

But the airline, which posted an operating loss of 115.8 billion yen for the first nine months of the financial year, maintained its October forecast for a 125 billion yen full-year loss, pointing to a return to the red in the fourth quarter. ($1 = 114.9800 yen)

Chief Financial Officer Ichiro Fukuzawa said it was difficult in January to meet its pre-Omicron target of reaching 80% of pre-pandemic domestic passenger numbers and 20% of pre-pandemic international passenger numbers.

Third quarter domestic passenger numbers rose to around 50% of pre-pandemic levels as Japan lifted a state of emergency, with international passengers at around 10% of pre-pandemic levels due to tight border controls.

In the fourth quarter, it faces headwinds from record COVID-19 case numbers.

Japan last week expanded regions subject to tighter coronavirus curbs to cover 70% of the country, as the government tried to counter a wave of COVID-19 cases caused by the Omicron variant, reported reuters.com.