Japan’s second-largest airline, Japan Airlines Co Ltd (JAL) on Tuesday announced its rather narrow first-half loss before interest and tax from a year ago.
The airline company achieved so due to the cost cuts it undertook during the pandemic; however, it continued to flag a wider-than-expected annual loss.
According to the company’s regulatory filings report, it posted a first-half loss of 151.8 billion yen ($1.34 billion). While in the prior year, in the six months ended Sept. 30, the airline had reported a loss of 223.9 billion yen.
According to a poll conducted by Refinitiv, JAL is expected to report a full-year loss of 198 billion yen, which is larger than the consensus loss of 120 billion yen.
The airline in August had also failed to provide full-year earnings forecast, by saying that the pandemic uncertainty made prediction too difficult.
The airline was badly hit as Japan was under a state of emergency for much of the second quarter. It had mentioned its workforce to possibly shrink by 2,500 people by the end of the business year on March 31 to 33,500 people over older workers getting retired and holding off new hiring to lower costs.
The airline’s rival ANA Holdings Inc (9202.T) last week also announced that it expects to report an operating loss in the current financial year, down from an earlier prediction of a profit. While it also plans to reduce staff numbers within five years by 20%, through attrition and retirement.
JAL expects its business to gain by the fourth quarter of the financial year as travel demand improved.
According to the company, it expects domestic passenger numbers to increase in March and reach 92% of pre-COVID levels, even though international traffic would remain subdued at 23% of pre-COVID levels.
On Tuesday, the Japanese government confirmed its plans to gradually ease COVID-19 border restrictions. However, the country is still under strict regulations preventing most non-resident foreigners, including tourists and business travellers, from entering.
Chief Cabinet Secretary Hirokazu Matsuno commented that they hae decided to review border controls in stages.