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Japanese Airlines cuts profit forecast more than 40% as virus bites

Japan Airlines also sharply revised down its operating profit forecasts to ¥100 billion from ¥140 billion. (AFP)
Japan Airlines also sharply revised down its operating profit forecasts to ¥100 billion from ¥140 billion. (AFP)
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22 Apr 2020 08:04:21 GMT9
22 Apr 2020 08:04:21 GMT9
  • Japanese Airlines: Demand had plunged owing to entry bans around the world
  • Firm’s downward revision came a day after cash-strapped Virgin Australia filed for insolvency

TOKYO: Japanese Airlines on Wednesday slashed its forecast for annual net profits by 43 percent because of the coronavirus, making it the latest carrier to fly into virus-related turbulence as global tourism plummets.

With COVID-19 hammering both domestic and international routes, JAL said net profit for the fiscal year ending in March would be $500 million (¥53 billion), against an earlier forecast of ¥93 billion.

JAL said demand had plunged owing to entry bans around the world, the cancelation of major domestic events and a state of emergency in

Japan with authorities requesting citizens refrain from travel.
“We canceled and reduced flights and we also used smaller planes, but these efforts didn’t make up for the losses,” the firm said in a statement.

JAL also sharply revised down its operating profit forecasts to ¥100 billion from ¥140 billion while sales were forecast to fall to ¥1.41 trillion from a previous estimate of ¥1.48 trillion.

JAL posted ¥150 billion in net profits in its previous fiscal year.
The firm’s downward revision came a day after cash-strapped Virgin

Australia filed for insolvency because of the coronavirus pandemic, which has ravaged the global airline industry.

The firm was more than A$5 billion ($3.2 billion) in debt and had appealed for an A$1.4-billion loan to stay afloat, but the Australian government refused to bail out the majority foreign-owned company.

This week, Norwegian Air announced that four subsidiaries in Sweden and Denmark had filed for bankruptcy while Japan’s other major airline ANA slashed its annual net profit forecast by 71 percent.

ANA and JAL are both scheduled to release full-year earnings later this month.

AFP

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