All Nippon Airways has given no indication when the coronavirus clouds will clear as it seeks billions of yen in loans and credits.
The warning from the Japanese carrier came as it reported a 100 billion yen slump in operating income to 60.8 million yen in the year to March 31 over the previous 12 months.
Net profit was down from 110.7 billion yen to 27.4 billion yen.
The airline said: “While ANA sought to reduce costs and combat the increase in expenses – such as the expansion of arrival/departure slots at airports in the Tokyo metropolitan area – the number of scheduled flights were significantly reduced to match the sudden decline in demand in the fourth quarter.”
ANA will continue to “actively take measures” to maintain stability in its finances “under these unprecedented conditions”.
The airline began securing funds of 100 billion yen through bank loans this month and aims to raise a credit commitment of 350 billion yen in addition to an existing 150 billion yen credit line.
ANA has withdrawn its dividend payment to shareholders in the current financial year “until we are able to project a rational forecast and the financial conditions as well as the business environment stabilises”.
The number of international flights has been cut by 90% and 70% on domestic routes.
Looking forward, the carrier said: “The outlook for the next financial year is that economic conditions will continue to be very challenging due to the impact of the coronavirus, and there are also concerns about the risk that the spread of the virus will further stagnate the global economy.
“Although the Japanese government plans to implement measures to support the economy, the deterioration of the job and disposable income environment caused by declining corporate earnings and the slump in consumer spending is thought to be unavoidable.”
Chief financial officer Ichiro Fukuzawa said: “ANA expects the current decline in passenger demand will continue, as it is unclear when the spread of the coronavirus will end and for government travel restrictions to be lifted.
“Since it is difficult to make a reasonable business forecast for the 2020 fiscal year that started this month, we are not making an announcement at this time.
“At the same time, we are securing funds through bank loans and raising the amount of credit commitment line, and actively taking measures at a conservative level to maintain stability in liquidity on hand.”