Japan Airlines (JAL) said on Friday that its fourth-quarter operating loss quadrupled to 104.1 billion yen ($953.9 million) as coronavirus restrictions continued to curb air travel demand.
The result for the three months to March 31, which compares with a loss of 25.9 billion yen a year ago, was worse than an estimated average 88.96 billion yen loss from three analyst surveyed by Refinitiv.
Japan’s second-biggest airline and other carriers around the world have had to cope with a collapse in international and domestic air travel caused by coronavirus travel restrictions.
The airline did not provide an earnings forecast for the current business year. Eleven analysts predict an average 56 billion yen loss, Refinitiv data shows.
JAL, like bigger local rival ANA Holdings, saw demand rebound on domestic routes at the end of last year to around half of pre-pandemic levels, helped by government discounts on air tickets and hotels.
That recovery, however, faltered as fresh waves of coronavirus infections prompted new lockdowns.
Passenger numbers on international routes are still only around 5% of what the carrier would normally see.
To adapt to an air travel market that may see a long-term dip in demand for business travel even after the pandemic ends, the Japanese airline said it will expand discount carrier units that will focus on tourism demand in Asia. It also plans to expand its air cargo business.
JAL said it will increase the number of Boeing 787 planes at its Zipair discount airline by two a year to 10 by 2025 and will establish Spring Airlines Japan, a joint venture with China’s Spring Airlines, as a consolidated subsidiary in June. The carrier said it will add new routes to capture demand from Chinese travelers coming to Japan.
To lower costs, it plans to retire 26 of its Boeing Co. 777 widebodies by March 2023. At the same time, it will add 13 fuel-efficient Airbus A350 jets.
Japan Airlines has so far avoided making major cuts to staffing levels and workers’ salaries to reduce costs during the slump.
The company in November shored up its finances with a 183 billion yen stock offer that was equivalent to 30% of its existing shares..
Its shares were up 1.5% on Friday, compared with a flat broader market. The stock has gained about 16.5% so far this year after slumping 41% in 2020.