Japan Airlines’ Outlook Worsens After Quarter Misses Estimates

(Bloomberg) -- Japan Airlines Co. expects a worse loss this fiscal year than previously forecast as the coronavirus wreaks havoc on international demand for travel.

The nation's flag carrier is now forecasting a net loss of 300 billion yen ($2.9 billion) for the 12 months ending March 31 and sales of 460 billion yen, according to an exchange filing Monday.

For the third quarter, JAL reported a net loss of 51.5 billion yen, wider than the 36.9 billion yen estimated by analysts. Sales for the period were 161.8 billion yen versus the 170 billion yen forecast.

Airlines in Japan are facing a grim outlook as Covid-19 cases rise and the nation extends its state of emergency. Surging virus numbers in Asia's second-biggest economy could have limited JAL's traffic in the third quarter to just 27% of pre-pandemic levels, Bloomberg Intelligence analysts said last month.

Prime Minister Yoshihide Suga declared a state of emergency in major cities including Tokyo in January, after the country's “Go To” domestic tourism push aggravated infections. Overseas visitors meanwhile are almost non-existent, down 97.7% in December from a year earlier, according to Japan's national tourism organization.

Japan is also still yet to reach a conclusion on whether to go ahead with the Olympics later this year. While Thomas Bach, president of the International Olympic Committee, and the Japanese government are pledging to forge ahead, an NHK poll shows that almost 80% of people think the games should be canceled or postponed.

The nation's other big airline, ANA Holdings Inc., on Friday reported a quarterly operating loss that was slightly narrower than analysts' estimates. ANA's pledge to get back into the black next fiscal year looks challenging considering the pandemic shows no sign of abating.

Shares in JAL were little changed in Tokyo on Monday. They plunged 41% last year versus ANA's 37% decline.

JAL was previously forecasting a net loss of as much as 270 billion yen this fiscal year, its first slide into the red since emerging from one of the country's biggest-ever bankruptcies.

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